What's a City To Do? Explaining Differences in Local Economic Development Policies

• Author: Gary P. Green,Tsz Man Kwong,Arnold Fleischmann
• Date: 01 September 1992
• DOI: 10.1177/106591299204500307
• Published date: 01 September 1992
• Subject Matter: Articles

WHAT’S A CITY TO DO?
EXPLAINING DIFFERENCES IN LOCAL ECONOMIC
DEVELOPMENT
POLICIES
ARNOLD FLEISCHMANN, GARY P. GREEN, and TSZ MAN KWONG
University of Georgia
conomic
development has become perhaps the critical item on
r~ the policy agendas of American communities. Faced with major
economic and social changes, intense citizen demands, and
declining federal aid, local leaders have adopted a host of policies to
promote the economic and fiscal health of their communities. Some
observers have criticized such efforts as an &dquo;arms race&dquo; in which local
officials adopt virtually any tactic in order to keep up with the compe-
tition even though such policies have limited effect on business deci-
sions (Grady 1987; Wolman 1988). Arms race imagery is reinforced
by the advice given to policy-makers, which tends toward shopping
lists of incentives, organizational plans, analytical techniques, and pro-
cesses believed to promote development (see Farr 1984; Malizia 1985;
Blakely 1989).
There are two problems with this &dquo;intense preoccupation with eco-
nomic development that has been marked by a level of consensus and
expectation unusual in American politics&dquo; (Eisinger 1988: 3). First,
those interested in the practice of economic development have placed
such emphasis on being exhaustive in identifying options that they
tend to ignore variation in the conditions under which communities
are willing or able to adopt different policies. Second, scholars have
examined such variation, but have been polarized around two compet-
ing explanations, one based on the broader economic and political sys-
tems (structure) and another that relies on the actions of local political
and economic actors (agency). This note addresses these issues by
analyzing variation in the economic development policies adopted by a
large national sample of city governments.
Received: March 18, 1991
Accepted for Publication: October 31, 1991
NOTE: This research was supported in part by the Faculty Research Grants Program
and the Institute of Community and Area Development at the University of
Georgia. An earlier version of this paper was presented at the 1990 annual
meeting of the American Political Science Association. Thanks to Paul Brace and
Mark Schneider for their comments on that draft.

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STRUCTURE, AGENCY, AND LOCAL ECONOMIC DEVELOPMENT POLICY
The structure-versus-agency debate has been carried on primarily
in theoretical and case study research and can only be summarized
here (see Swanstrom 1985; Wong 1988; Kantor 1988: 2-26). The
underlying premise of structural theories is that urban development is
shaped by economic and social conditions beyond the control of local
policy-makers. Peterson (1981: 20), for instance, argues that cities
must promote their &dquo;interest,&dquo; i.e., &dquo;the economic position, social pres-
tige, or political power of the city, taken as a whole.&dquo; They are con-
strained, however, by the ability of many businesses and residents to
move to another city if tax levels become too high or services seem
inadequate. Local officials act in response to this pressure by compet-
ing with other cities to attract new firms and residents and to keep
existing taxpayers from moving.
Theories emphasizing human agency attribute development to spe-
cific actors and their interests. Emphasis is placed on leadership, coa-
lition building, organization, political influence, and similar elements
in the local policy process. Logan and Molotch (1987) link develop-
ment to &dquo;growth machines&dquo; comprised primarily of politicians, the
local media, retailers, and utility companies, all of whom profit from
the growth of the community as a whole, as well as developers, real-
tors, mortgage companies, and similar interests who benefit from the
increased value of particular pieces of property. Similarly, Stone (1989)
emphasizes changes in &dquo;urban regimes&dquo; as the key to development
policies, while Mollenkopf (1983) argues for the primacy of &dquo;political
entrepreneurs&dquo;-politicians who use new programs to promote growth,
thereby expanding their coalitions and political power.
FACTORS INFLUENCING THE ADOPTION OF DEVELOPMENT POLICIES
One cannot &dquo;test&dquo; structural and actor-centered theories in a sta-
tistical sense. They can be evaluated heuristically, however, with appro-
priate variables from existing research on urban development politics.
Structural theories imply that the more adversely a city is affected by
broad economic, demographic, and political forces, the more develop-
ment policies its officials will adopt. In terms of economic factors,
deindustrialization in the past decade suggests that communities heavily
dependent on manufacturing will adopt more policies. Economic well-
being also can vary with the metropolitan status of a community: cen-
tral cities have tried to adapt as headquarters centers; nonmetropolitan

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679
communities have tended to focus on mobile capital. Suburbs, how-
ever, generally benefit from the dispersion of economic activity within
metropolitan areas - the &dquo;suburban spill-in&dquo; effect - and may have lit-
tle need to promote growth (Noyelle and Stanback 1983; Baldassare
1986; Berry and Kasarda 1977; Schneider 1989; Markusen 1989;
Green and Fleischmann 1991).
Several demographic characteristics can be expected to influence
development policy. Total population, like metropolitan status, gauges
a city’s place in the urban hierarchy. Larger cities are expected to
adopt more economic development programs due to the diversity of
both resources and pressures for doing so (Noyelle and Stanback 1983;
Friedman 1990; Cook and Beck 1991). In terms of change, slow growth
or outright decline may make cities more vulnerable to pressure to
promote growth (Jones and Bachelor 1986; Rubin 1986; Rubin and
Rubin 1987), while rapidly growing places feel little push to stimulate
development and may even try to limit growth (Baldassare 1986; Logan
and Zhou 1990). Regarding composition, cities with large numbers of
poor residents are more likely to promote development extensively
because of the costs of redistributive programs or constituent pressure
to improve the local economy (Peterson 1981).
Structural theories also suggest that actions by other governments
will affect cities’ development strategies. In particular, heavy depen-
dence on intergovernmental revenue as federal aid declined during the
1980s should lead cities to adopt more policies to stimulate the local
economy (Rubin and Rubin 1987; Sharp 1990: 149-83, 215-35). As
the arms race metaphor implies, the economic development initiatives
of neighboring cities should stimulate a city to enact more programs
(see Grady 1987; Bowman 1988).
Actor-centered theories point to several local factors that can affect
development policy. One is political leadership. Although the litera-
ture is somewhat ambiguous, more development policies are likely to
be adopted in cities with a mayor-council government, where mayors
are expected to be more responsive to citizen and group pressures than
are politicians in cities using the council-manager plan (see Lineberry
and Fowler 1967; Feiock and Clingermayer 1986). A related aspect of
leadership is the role of local government. In particular, activism by
progrowth coalitions should result in government or a public-private
partnership, rather than the private sector, being the lead...