Academic journal article Journal of the Community Development Society

Civic Involvement, Organizational Ties, and Local Economic Development

Academic journal article Journal of the Community Development Society

Civic Involvement, Organizational Ties, and Local Economic Development

Article excerpt

ABSTRACT

Research on local economic development has taken a significant turn in recent years. Much of the previous work has focused on market factors that influence the adoption of economic development policies or the effects of policy adoption on employment and population change. There is a growing interest, however, in the role of social factors in local and regional economic development. In this paper. I examine how organizational networks and civic participation may affect employment growth in municipalities across the non-metropolitan United States. The organizational networks of local governments consistently influence the success of their economic development efforts, while civic participation has no effect on job growth. The benefits of organizational contacts are largely due to increased levels of information and potential sources of resources through organizational contacts rather than through increased levels of public participation or local government integrity.

Keywords: civic participation, local economic development, oganizational networks

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INTRODUCTION

During the past two decades, local governments have been engaged in an escalating competition to attract jobs to their community, what some refer to as an "arms race" for economic development. Local governments officials are attempting to generate new sources of revenue through economic development (Clarke & Gaile, 1989; 1992; Eisinger, 1988). Use of tax breaks and other incentives to attract businesses have been controversial, especially because the competition has raised the subsidies offered to businesses to new levels (Anderson & Wassmer, 2000). There are numerous examples of corporations that have played one locality off against another to obtain more tax breaks or other benefits. Research on the effects of these incentives continues to be inconclusive about the long-term impacts and outcomes on local communities.

There is growing interest in the literature on the role of organizational networks and civic factors in local economic development (Reese & Rosenfeld, 2002). Although social factors have been defined in a variety of ways in the literature, there are two broad approaches to their influence. First, a growing number of studies have examined the role of citizen participation in the local development process. Much of this literature has been inspired by Robert Putnam's (1993) work suggesting that civic organizations are critical to the economic success of Italian regions. In the United States, this work has focused the correlates between the use of public hearings, citizen committees, and elected neighborhood commissions and growth efforts. The central claim is that public involvement influences the level and type of growth effort in localities, presumably because citizens have much different interests than the growth machine.

Another distinct approach has been to examine the role of inter- and intracommunity networks and linkages in stimulating local economic development. Forming ties with external organizations and institutions may improve access to information and key resources, such as grants, loans, etc. Establishing networks with utilities and state government officials may improve the odds that a mobile firm will be directed to look at a particular locality. Finally, by developing strong, local networks among local organizations, the local government may be able to more effectively mobilize the community and provide a single voice with external actors. In this paper, I examine the relative impact of these organizational network and civic participation factors on employment growth among municipalities in non-metropolitan America.

These issues surrounding the effects of organizational networks and civic participation are at the heart of the community development process. Involving citizens in policy making and building broader social networks are considered essential elements of building community capacity. …

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