Reese, Rosenfeld / QUESTIONING CONVENTIONAL WISDOM
In both situations, city officials are reacting to the needs of their respective businesses. Because business composition differs among cities, it is understandable that the content of economic devel- opment policy, the role of businesses in making policy, and the extent of business involvement in policy implementation also vary. Yes, businesses matter, but they do not necessarily have the same roles in the regime, nor do the same policies result.
Another element of the conventional wisdom is that businesses will always push for incentives to lower the costs of production. Yes, but . . . current and potential businesses have different needs and interests (see above). Businesses may value predictability and cooperation over the bottom line, and businesses have a stake in the overall health of the local community. Business pressures are more complex than the zero-sum competition the literature seems to suggest. For example, regression analysis of survey data indicates that business input is related to a number of different economic development policies. Greater levels of business input are associated with greater use of development loans and more active marketing campaigns by local governments. But they do not seem to influence the use of financial incentives such as tax abatements. In a broader sense, busi- ness input is also positively correlated with alternative goals emphasizing new investment and small business development, as opposed to more traditional industrial attraction strategies. Thus, although in some cases business input has the predictable effects of increasing small-business loans, it does not appear to lead to the more traditional financial incentives, site preparation, or infrastructure investment. Furthermore, it appears that there are as many cities in the data set where progrowth and no-growth groups are evenly represented in the input structure as there are cities where progrowth groups predominate. It may not be safe to conclude that the growth machine dominates decisions in all or even most cases.
Businesses may value predictability and cooperation over the bottom line, and businesses have a stake in the overall health of the local community.
Case study data suggest that where business input and involvement in both decision making and implementation is high, the result appears to be a greater emphasis on business volunteerism and support for all aspects of the community. This extends from arts to education, includes more emphasis on quality-of-life issues, and in some cases, reduces the use of public funds for economic development. It is also linked to the presence of Type II policies such as local purchasing goals, for- mulae for tax abatements that include the number and quality of jobs generated, and claw-back provisions.
A corollary of the above argument—that businesses will push only for self-interest incentives— is the contention that business and citizen needs and desires are incompatible. Businesses presum- ably are pushing for policies to lower their costs of production and shift public resources to private firms. Citizens, on the other hand, presumably want neighborhood or service improvements over business development. Or at the very least, they support economic development policies that prom- ise to give something back to the community through local hiring requirements, worker training, or public benefits accruing from linkage programs. These assumptions are belied by several findings. For example, survey data suggest that business and citizen input are not trade-offs or mutually exclusive; rather, they are positively and significantly correlated. In other words, communities that are more open to business input are also more open to citizen input. Thus, even assuming a singular self-interest by businesses, neighborhood or citizen concerns should provide a countervailing force.
In politically inclusive cities such as Oakville and Fairborn, avenues for both citizens and busi- nesses appear related to greater use of planning and evaluating strategies and a tendency to more closely examine the potential impacts of growth. Although these two cities vary greatly in their economic health, it appears that in both cases, the avenues for citizen and business input produce a balanced approach to economic development. In short, business input matters, but the presence of many avenues for citizen input and the differentiation among local businesses can lead to different goals among businesses and variation in the roles they assume in the community. From a public benefit standpoint, high levels of business input can be a good thing.
Finally, it is important to recognize the difficulty of accurately measuring citizen and business input. Input mechanisms can be confused with actual input or actual influence. Much of the con- ventional wisdom may be based on data measuring opportunities for input that are interpreted