Introduction and Overview
Norman Walzer and Brian D. Jacobs
The role of city governments in local economic development in the United States and Europe has been well established and varied, usually related to local economic conditions. During years of relative economic prosperity, city officials are concerned mainly with providing public services at acceptable tax rates with relatively little concern about aggressively marketing the city as a location for businesses. Certainly, during the expansionary periods of the 1960s and 1970s, city officials were concerned about service delivery, infrastructure expansion, and other traditional activities financed by increased financial support from central governments. Now the accent is on competitiveness and economic restructuring and the location of new business/government initiatives.
In the United States, proactive economic development efforts prior to the 1980s were more often conducted by state or regional governments. These governments often competed for business activity and, in many instances, tried to provide a competitive business climate by adjusting taxes or workers’ benefits and making low cost loans available to starting businesses (Cobb 1993; Portz 1993). For many years, cities engaged in these efforts in very limited ways.
The 1980s brought significant changes in the fiscal climate facing many cities. A conservative attitude toward taxes and spending swept many countries. Elected political leaders tried to reduce the size of the central government, often with cutbacks in financial support to local governments. Central governments, in some instances, had programs that brought mounting budget deficits, especially with a stagnant local eco-