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Reese, Rosenfeld / QUESTIONING CONVENTIONAL WISDOM

entrepreneurialism. For these cities, taking creative advantage of a number of program and funding options and scanning the environment to find new policies that can be adapted for local use repre- sent a creative, proactive, and entrepreneurial strategy. Yes, pursuit of a wide number of possible economic development policies and copying policies used elsewhere may be shooting, but it may reflect a conscious, innovative, and creative approach to policy, particularly when linked to plan- ning and evaluation.

Economic Determinism

Conventional wisdom also suggests that economic development policy making is largely about economics and, to a lesser extent, politics. Although it is widely agreed that politics matters and that economic determinism alone cannot explain local policy, it is accepted that fiscal and eco- nomic stress force cities to provide costly incentives to businesses (Jones & Bachelor, 1993). Such environmental factors may not determine but certainly define what is possible in local economic development. Yes, but . . . the determinants of local economic development policies include more than local fiscal health, intercity competition, or even governing regime. Economics, as well as other broader forces in a locality, including, but not restricted to, governing regime, frame the eco- nomic development policy process and shape each city’s approach to economic development.

Regression analyses using six policy types as dependent variables—loans, zoning, marketing, demand-side policies, financial incentives, and Type II policies—and a variety of economic, struc- tural, and cultural variables clearly indicate that the determinants of local development policy rep- resent a complex mix of forces. An index of residential need, including average income, poverty rates, and unemployment, affects only three policy areas (loans, zoning, and financial incentives). In no case is it the best predictor of the policy in question. Other forces, such as governmental struc- ture, input systems, planning and evaluation, approach to economic development, and develop- ment goals, are equally influential in determining local development policies.

Case study analysis also highlights the variable effects of the economy. For example, the most economically stressed cities—Cornwall, Cadillac, and Romulus—manifest differing approaches to economic development. Indeed, even the governing regimes vary significantly across cities. In Romulus, the mayor dominates decision making, and the economic development policies reflect a mix of traditional location incentives as well as a number of Type II policies including performance guarantees, local hiring goals, and an abatement formula that gives consideration to the number and type of jobs likely to be generated. Clearly, this stressed city is not giving away the store. Pol- icies in Cadillac, with a development regime dominated by local officials and business interests, have already been discussed; they represent a creative and innovative approach to economic devel- opment, not one driven by desperation. Finally, Cornwall, with a regime basically devoid of either citizen or business input, has an essentially passive approach to economic development, with efforts focused on marketing and the development of an industrial park. Again, this is not a city driven to offer incentives, despite a weak economy. Yes, the economy matters for some policies, but it does not determine policy across the board. Nor does it appear to determine the composition of the governing regime. Local history and patterns of process and interaction also matter when it comes to how economic development decisions are made and the policies that emerge.

LOCAL CIVIC CULTURE: A THEORY REVISITED

The fact that much of the conventional wisdom appears only partially correct is a result of meth- odological problems. In addition, the “yes, buts . . . ” offered here say less about what the conven- tional wisdom says and much about what it does not. In short, the “sins” may be more of omission than commission. Why is it that much current thought and theory does not appear to fully portray the realities of local economic development? To fully understand the forces behind the choice and use of particular economic development policies in communities, research must include an exami- nation of local civic culture. Even regime theory, allowing as it does for variations in local

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