The Politics of Economic Development Policy

Abstract

Based on data from a national sample survey of cities, this article shows that there is considerable variation in the extent to which mechanisms for citizen involvement are in place for economic development decision making. More important, the analysis shows that, for cities that are suffering from property tax stress, there are interesting and significant implications of citizen involvement in the economic development process. Where tax stress is high, higher levels of citizen involvement are associated with greater use of development tools such as loan guarantees that minimize apparent tax costs, as well as development activities that provide credit-claiming opportunities for politicians. However, greater citizen involvement diminishes the likelihood that the city will use tax abatement.