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Two Steps Forward, One Step Back: Uncertainty in Local Economic Development

Ann O’M. Bowman University of South Carolina

The Reese and Rosenfeld analysis of the conventional wisdom about economic devel- opment is important and timely. They correctly argue that research has not yielded a set of unequivocal laws, general truths, or first principles regarding local economic development. Howeve , in their enthusiasm to arrive at their conclusion, they over- state the problem, and they overlook methodological advances in the field. Over the past 15 years, researchers have produced findings that clarify and fine-tune a dynamic and complex process. Furthermore, the Reese and Rosenfeld prescription—to focus on the unique civic culture of a community as the explanatory variable—takes inquiry in the wrong direction.

Economic development is a tough field in which to toil. That’s true whether one actually does eco- nomic development or simply studies it. City economic development officials may spend weeks and months trying to lure a big prospect, only to see the firm locate elsewhere. They lament the lost opportunity—the relocating corporation that would have meant 500 new jobs, the start-up com- pany that would have led to additional investment, the signature sports team that would have trans- formed the city’s image. They complain about recalcitrant elected officials, about administrators unwilling to think outside the box. Or they single out the unfair practices of competing jurisdictions or the whimsical decision-making processes of corporate leaders.

Students of local economic development policy have similar experiences when they try to understand the phenomenon. They design an elaborate survey of the economic development prac- tices of hundreds of jurisdictions and discover, when tallying the responses, that items on the ques- tionnaire have been interpreted differently from one respondent to another. They identify seemingly important causal variables only to construct a model that explains less than 20% of the variance. They devote large amounts of research time to unearth the tiniest details of a specific city’s economic development behavior only to find that in the town across the river, a different set of details seems to matter. Is it any wonder, then, that even the most experienced practitioners and scholars alike might be tempted to throw up their hands in exasperation and ask, What really mat- ters in local economic development?

In their article, “Yes, But . . . : Questioning the Conventional Wisdom About Economic Devel- opment,” Laura Reese and Raymond Rosenfeld (2001 [pp. 299-312, this issue]) tackle the “what really matters” question straight on. Reexamining some of the extant research findings and adding

ECONOMIC DEVELOPMENT QUARTERLY, Vol. 15 No. 4, November 2001 317-319 © 2001 Sage Publications

Ann O’M. Bowman is James F. and Maude B. Byrnes Professor of Government at the University of South Carolina. Her current research (with Michael A. Pagano) on urban vacant land has been published in Urban Affairs Review and in the Brookings Institution’s Survey Series.


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