LOCAL ECONOMIC DEVELOPMENT IN THE UNITED STATES AND CANADA Institutionalizing Policy Approaches

Maintaining and enhancing the fiscal health of local economies has been a heightened concern of local governments in both the United States and Canada for the past 20 years. Local economic development policies have been a primary focus of policy ma kers, eco- nomicdevelopment practitioners, and scholars alike. As the 21stcentury begins, it is useful to reconsider what local governments are doing to pursue economic development, assess whether development goals and policies have become institutionalized or if they are chang- ingovertime, and consider to what extent U.S. and Canadian policies appeart obe converging or diverging over time. Over the past two decades, scholars and evaluators have made anumberofrecommenda- tionsforlocal policies. These recommendations have included suggestions to shift the focus of local economic development efforts from large-scale industrial attraction to internal business development (Eisinger, 1988), enhance export industries to bring revenue into the local economy (Blakely, 1994), target only those industries with the greatest potential for growth (Voytek&Ledebur, 1991), identify local business clusters where there maybe a competitive advantage (Hill&Brennan, 2000), and use economic development policies to better director redistribute the benefits of growth to more depressed areas and populations (Reese, 1998). Yet despite these scholarly recommendations, it is not clear that the goals of and strategies for local economic development have changed much over the past two decades. Are cities altering or refining the types of economic development programs and policies employed overtime? Or has the practice of local economic development remained largely stable over the past two decades? Research based on panel data from the 1980 stotheearly 1990ssuggested little had changed in local economic development practice; cities were sim - ply doing more of what they always had been doing to foster local economic development. Furthermore, it appeared that cities in Canada and the United States were more similar than different in their overall patterns of use of economic developmenttechni ques. And the lim - itedvariation appeared to be more of scale than substance (Reese&Fasenfest, 1996). In 1994, Blakelystated that"industrial attraction theory is the economic development model most widely used by all communities. The basic assumption that underlies attraction theory is that a community can alter its market position with industrialists by offering incentives and subsidies" (p. 58). Such incentives and other attributes of a city would then need to be"packaged"and promoted to attract investment that would presumably lead to economic growth. Thus, at least by the early 1990s, it appeared that a relatively traditional approach to eco- nomicdevelopment, based on attraction theory, was well established in cities in both nations, albeit to a somewhat lesser extent in Canada (Reese & Fasenfest, 1996)download