THE EFFECTIVENESS OF LOCAL ECONOMIC-DEVELOPMENT POLICIES IN THE 1980S

Objective. Local governments in the United States have adopted a wide variety of policies to stimulate their local economies, but there is s till debate over the effectiveness of such efforts. This paper examine s the relationship between local development policies and changes in t he number of jobs in both the manufacturing and service sectors during the mid-1980s. Methods. Data cover almost 900 cities and are based on Census Bureau sources and a 1984 International City Management Associ ation survey of local governments. A two-stage least squares regressio n analysis is used. Results. The findings indicate that policy adoptio n had a limited effect on employment change from 1982 to 1987. For bot h manufacturing and service employment, market factors had the stronge st effect on employment growth. Conclusions. The findings suggest that local economic development policies had a limited influence on change s in the number of jobs in cities during the economic recovery of the 1980s. Local investment in infrastructure and education, however, may enhance employment growth in both the manufacturing and service sector s.