Academic journal article Canadian Public Administration

Cooperation, Coordination and Competition: Why Do Municipalities Participate in Economic Development Alliances?

Academic journal article Canadian Public Administration

Cooperation, Coordination and Competition: Why Do Municipalities Participate in Economic Development Alliances?

Article excerpt

Introduction

Municipalities cooperate on a host of policy areas (Bae and Feiock 2012; Farmer 2010; Andrew 2009; Feiock 2013). Improving fiscal health is frequently cited as a motivator for inter-local cooperation (Morgan and Hirlinger 1991; Hawkins 2009). In most policy areas there is a perceived benefit of cooperation. For example, partnering with another municipality may reduce the capital and operating costs of certain projects. Economic development is often seen much differently than other potential areas of cooperation. The literature has shown that municipalities have contrasting views on economic development cooperation, with some seeing neighbouring communities as fruitful partners (Arku 2014; Gordon 2009) and others viewing them as competition (Morin and Hanley 2004; Wolfson and Frisken 2000). In many areas, economic development is seen as a zero-sum game: development in one community is seen as a loss for another (Goetz and Kayser 1993).

Despite concerns over competition, municipalities occasionally cooperate on economic development initiatives. Many scholars have examined these counterintuitive arrangements (Arganoff and McGuire 2003; Blakely and Leigh 2010; Gordon 2009; Jansen 1994). This article further explores these dynamics by examining the creation of regional economic development alliances (EDA), which are permanent joint-decision making bodies that pool municipal resources to attract investment on a regional scale. Often EDAs incorporate other public sector groups (for example, other levels of government) and private sector actors. However, these latter groups are generally passive members, included mainly to facilitate funding arrangements and provide knowledge of local economic conditions. Municipalities drive EDAs, providing the majority of the resources and policy capacity. They set the goals of the group and facilitate operations. EDAs are very different than general economic development practices, whereby the scale of investment attraction and commitment are much different. In many cases, these arrangements require pooling of resources, and a loss of capacity and autonomy.

Examining EDA dynamics differentiates this study from other Canadian studies on economic development: some examined single provinces (Arku 2014; Tassonyi 2005) or individual city-regions (Wolfson and Frisken 2000). While immensely valuable, these studies examined individual municipal efforts or perceptions of economic development, as opposed to formal organizations with a significant degree of institutional integration.

This research also sheds light on the understudied area of economic development cooperation in Canada. Much of the existing research is American. Canadian municipalities operate in a very different regulatory and legal environment than their American counterparts and are greatly restrained in the limitations of their local powers (Sancton 1993: 5; Siegel 1997: 129). Provincial legislation guides all municipal financial dealings, including regulations relating to taxing, charging, borrowing and spending (Arku 2014; Graham, Phillips and Maslove 1998). (1) These limitations also extend to the field of economic development, where most provincial governments prohibit granting bonuses to private firms and limit the conveyance of economic benefits to private businesses (Gertler 1990; Wolfson and Frisken 2000; Tassonyi 2005). Therefore, the motivations and perceived incentives of cooperation on economic development vary significantly. (2) Through interviews with economic development officials, this paper asks a series of questions about the formation and dissolution of EDAs in Canada: What motivates municipalities to enter into formal EDAs? On what terms is cooperation achieved? How are potential gains (or losses) distributed? Why, and how, are these cooperative relationships dissolved?

Twenty primary interviews were conducted with EDA officials in Alberta, Manitoba and Ontario. …

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