Is There A Role for Economic Development?
In the seven years that we’ve been watching Tacoma via Exit133, we’ve seen a fair amount of change. The economy went up. Building went up. Shops opened. Restaurants opened. Then the economy went down …
The News Tribune’s Peter Callaghan wades into the recent departure of Tacoma’s Economic Development Director Ryan Petty with a question about local government’s overall role in chasing economic ideas. The article includes a long list of marketing ideas, projects, and initiatives. Some succeeded. Others haven’t been quite so successful.
… It’s about whether local governments can do much to move the economy in the first place or whether factors outside the control of politicians and bureaucrats are in charge.
Might they be better off sticking with the basics of providing infrastructure, public safety, parks and libraries, good schools and colleges? Might it be better to practice good government that might lead to lower taxes and better services for all, not just the chosen sectors?
Even if government has a role in jump-starting a flatlining city, at what point does it get out of the way and let – no, force – the private sector to stand on its own?
So what is the right role for government in helping economic development? Should the private sector chart Tacoma’s course for us? What would our private sector look like if left to stand on its own?
Or, fundamentally, is it time to break the model of economic development as it has been done and chart a new path?
Link to The News Tribune
Filed under: General
3 comments
R Richard May 17, 2012
“The best government is that which governs least.” – Thoreau
I can’t believe the 99% see the EDD as anything other than a handmaiden to the 1%.
R Random Economist May 17, 2012
I have worked in finance for government for a number of years, including positions as Finance Director and CFO of large jurisdictions. My caveat is that I am not and never have been an employee of the City of Tacoma.
Government isn’t very good at “economic development” for a number of reasons, which I will try to summarize here.
1. Government as a whole is a Political construct, not an economic one. The purpose of government is not economic development, but the orderly setting and enforcement of the rules that guide the interaction between citizens, businesses, and other governments. Because of this, none of the business edicts of “profit first” or “time is money” actually makes sense. In fact, in our style of government in the US, slow government action is preferred over fast action because it allows citizens more time to contemplate and interact with the policy decisions.
2. In order to be fair, Government has rules that prevent it from doing any real economic development. Theoretically government should not show favoritism to any one company or to any one person. THis prevents the government from doing the things that line the pockets of one particular group. Now, we all know that there are always ways to target a specific company or group if there are enough lawyers in the room (The recent attempt to not attract Wal-Mart is an example.)
3. Speaking of Wal-Mart, the fact that the City of Tacoma went out of its way to prevent the entrance of Wal-Mart shows that decisions for the government is not about economic development but about public policy instead. Economic Development would never say no to a business that would add jobs and income to the to the jurisdiction. Public Policy would say no if the jobs and businesses weren’t “the right kind.”
4. The tax structure of the State of Washington encourages urban sprawl for local governments to get additional revenue. Because the only real area that a local government can turn to for additional tax dollars rapidly is sales tax, retail sales are the engine for most of them in their quest for “economic development.” Which gets you big-box retail and the sprawl associated with that.
These are just a few things that point to the fact that local governments really can’t do much in terms of economic development. However, that doesn’t prevent politicians from using the term “economic development” to cloak their public policy decisions.
P Published Author RR Anderson May 17, 2012
walmart walmart. let’s all cry for walmart. Where is my Walmart bribe?