Organizing Local Agencies to Promote Economic Development

Abstract

Significant changes over the past two decades have intensified efforts by American cities to promote economic development. Yet, researchers and policymakers generally have ignored the extent to which communities differ in their economic development strategies. This article extends previous research with an examination of the variation in the way cities organize their bureaucracies to promote economic development. Findings indicate that larger cities and those with a wide range of economic development programs and higher property tax burdens are most likely to have a separate department for promoting development. Moreover, in cities that are more dependent upon manufacturing, local governments avoid leaving economic development in the hands of existing line departments. The results suggest that in smaller communities, officials may be unwilling or unable to centralize their development efforts, and in larger and more economically vulnerable cities, separate agencies may be used to resolve coordination problems, make growth a more visible issue, and overcome bureaucratic inertia in development programs.