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ECONOMIC DEVELOPMENT QUARTERLY / November 2001

variable in the analysis. For example, using the average number of economic development tools in an area as a measure of competition, Fleischmann, Green, and Kwong (1992) and Green and Fleischmann (1991) found a positive association between competition and economic development effort. In her study of tax abatements, Reese (1999) found that competition failed to explain tax abatement levels.

Political Influence

Many scholars argue that local policy making involves more than the unitary self-interest in economic benefits assumed by the city limits story.

Many scholars argue that local policy making involves more than the unitary self-interest in economic benefits assumed by the city limits story. The political perspective identifies power rela- tionships and institutional factors as important influences on city policy making. These factors have been applied to many city policy areas including studies of local economic development support.

The literature on the effect of power on the local policy-making process is represented by dis- tinct, but highly related, theories. Community power is one of the oldest explanations for city pol- icy decisions. This perspective focuses on the influence of elites on the policy-making process. Elites, often identified as local business interests, were thought to control the city policy agenda (Hunter, 1953; Jennings, 1964; Polsby, 1963). Pluralists rejected this view of the local policy pro- cess and argued that the participation of diverse interests can impact the policy agenda (Dahl, 1961; Wildavsky, 1964). Bachrach and Baratz (1962) criticized both the elite and pluralist models for ignoring a hidden source of power in their analyses. Specifically, these authors equate this power with the ability to keep issues from ever reaching the policy agenda. The interest in traditional com- munity power studies ebbed over two decades ago, but related arguments have emerged over time.

Land-based elites are the powerful force in the growth machine explanation of local policy mak- ing. These elites work to stimulate growth and marshal resources to increase land values for per- sonal profit (Logan & Molotch, 1987; Molotch, 1976; Molotch & Logan, 1984). This powerful group influences the policy agenda by working with local government to develop progrowth poli- cies. The growth machine argument has faded as more localities are experiencing an antigrowth, antisprawl movement initiated from the grassroots level.

Regime analysis shares characteristics with community power studies and the growth machine thesis. These relationships are reflected in the following definition (Keating, 1991) of regimes: “A set of arrangements through which policy decisions are made, encompassing formal structures and informal relationships, among political and economic elites comprising the governing coalition” (pp. 93-94). In other words, elites wield the power in local policy making, but the development of policy requires economic and political elites to work together. These arrangements between politi- cians and local business leaders were identified by Elkin (1987) in his study of Dallas, Texas. He described Dallas as an entrepreneurial political economy comprised of a progrowth coalition.

The distinctive characteristic of regime analysis is the nature of the public-private relationships. Instead of economic elites dominating the policy agenda or manipulating local public officials, regime analysis characterizes economic and political elites as collaborators seeking to achieve mutually desired outcomes. Policy outcomes depend on cooperation, interdependence, and long- lasting relationships between the elites. The primary role of the public sector is to coordinate and maintain the relationships (Stoker, 1995; Stone, 1986, 1993).

Interest group theory also is tied to community power and regime analyses. In each of these approaches, a coalition of individuals possesses power that can impact local policy making. For example, business is considered an interest group by some scholars (Clark & Ferguson, 1983). Racial minorities also are identified as an interest group in studies of urban policy (Greenstone & Peterson, 1976; Waste, 1989; Wong, 1990).

Local officials are thought to influence the direction of city policies. Some scholars have found that professional bureaucrats possess power to shape the local policy agenda (Appleton & Clark, 1989; Elkin, 1987). Other studies focus on the preferences of elected officials. For example, the spending preferences of mayors have been considered in several studies (Longoria, 1994; Saiz, 1999). In one study by Appleton and Clark (1989), the preferences of elected officials explained policy decisions better than did contextual variables such as the tax base.

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