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Why State and Local Economic Development Programs Cause so Little Economic Development

University of Michigan

Although evaluations show that state and local economic development programs have few effects on economic growth or redistribution of economic activity, explanations for the failures are incomplete. Technocratic explanations have dominated economic development research but cannot account for many program activities. Based on evidence from a Minnesota program, the best explanation emphasizes a perspective of bureaucratic and political imperatives. Economic development programs are not designed and implemented in ways that can achieve their goals, principally because of important politicalforces. Administrators must run a program to garner support of legislators, a governor, and opinion leaders for program survival. State and locally elected officials need economic development programs to deliver quick, visible projects in their efforts to solve their districts' economic problems, manage business climate politics, and achieve other aims. Achieving implicit goals means that programs only occasionally undertake activities likely to achieve explicit aims.

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