Academic journal article Public Administration Quarterly

Local Government and the Implementation of Alabama's Economic Development Policy

Academic journal article Public Administration Quarterly

Local Government and the Implementation of Alabama's Economic Development Policy

Article excerpt

ABSTRACT

Political power affects not only the outcome (success or failure) of policy implementation, but also the design of structures used to deliver the policy. Beginning with the premise that the social construction of reality shapes the way policy recipients are perceived as well as the costs and benefits imposed upon them, we explore the effects of political power on the delivery of benefits to advantaged populations. More specifically, we examine the impact of local, or sub-state, government in shaping state economic development policy. To empirically probe the effects of power, we have chosen the case of Honda's investment in Alabama in 1999. We reach two conclusions. First, clarity of objectives is not detrimental to effective implementation. Second, implementation structures may be designed with fuzzy objectives and questionable linkages to outcomes in order to secure the highest level of support. Bureaucratic discretion is not simply a function of issues or need for accountability, but also a function of the incentives derived by political power.

INTRODUCTION

Political power affects not only the outcome (success or failure) of policy implementation, but also the design of structures used to deliver the policy. While politicians are generally entrusted with creating effective and efficient designs, their political goals and power influence greatly the means to be used for delivering policy to target populations. Beginning with the premise that the social construction of reality shapes the way policy recipients are perceived as well as the costs and benefits imposed upon them (Schneider and Ingram, 1997), we explore the effects of political power on the delivery of benefits to advantaged populations. More specifically, we examine the impact of local, or sub-state, government in shaping state economic development policy. We are interested in a specific aspect of economic development policy, namely, the ability to attract foreign investors.

To empirically probe the effects of power, we have chosen the case of Honda's investment in Alabama. Several reasons guided our selection. First, the case is the prototypical example involving benefits and advantaged populations. Attracting potential investors usually involves tax breaks and other significant benefits. Business firms are the ideal example of advantaged populations. They have prestige, status, and economic power. As Lindblom (1977) observed many years ago, the state is structurally dependent on business. So politicians can ill afford not to confer benefits and other advantages onto corporations.

Second, political power between the state on the one hand and sub-state (local and county governments) on the other is quite dramatic in Alabama. So if the proposition has any validity, it should be most obvious and strongest in a case such as Alabama.

Third, intergovernmental power relations between state and sub-state governments have not received much attention in the literature. Most scholars of implementation have focused largely on relations between federal and state governments. While this tells us a lot about the external constraints placed on state governments, it provides few insights on the internal workings of state and local government.

Fourth, state economic development policy is an area of tremendous significance for the political fortunes of state and local politicians. Politicians hope that, other things being equal, investments by outsiders will translate into political votes at the ballot box.

Fifth, foreign direct investment is economically more important than domestic investment because it involves on average bigger capital amounts. For example, foreign direct investment in Alabama brought in $250,000 per job created in 1997. By contrast, the corresponding figure for domestic investors was $100,000 per job (Zahariadis, 2001). Finally, implementation of economic development policy in Alabama has not received adequate scholarly attention despite the state's recent notoriety for being particularly generous to foreign investors, e. …

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