Although federal economic development has fallen on hard times in the past decade, it remains important, especially in rural areas. In addition, the federal government can play key regulatory roles. We review the still powerful case for place-based approaches but argue that a number of program and policy reforms are pressing. Programs should place greater emphasis on human capital than they have and should explore the potential for consumption base strategies. Incentive competition should be regulated nationally. Greater coordination of economic development strategies across federal agencies is badly needed, and Congress should explore blocking up federal funding regionally. Better targeting and performance standards should be implemented and changes in crude place-based eligibility explored. Finally, rigorous and relevant evaluation research should be methodically undertaken, the results disseminated, and programs subsequently redesigned. We believe that these reforms can revitalize the practice of federal economic development and invigorate political support for it.
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