Rethinking federal policy for regional economic development

Economic development policy is a major priority of the federal government. Over the past century, Congress has created a panoply of programs aimed at economic development in communities and regions. These programs have sprung up at different times, with different goals, and with different ways of meeting those goals. Yet taken together they add up to a big priority and a lot of dollars. By one estimate, the federal economic development effort spanned 180 programs in 2004 and spent more than $180 billion. This is a critical time to take stock of this federal effort. The current deficit makes every dollar count in Washington. But there is a far more compelling reason to rethink federal policy for economic development: The world has changed but federal policy has not. Globalization of markets for goods, services, capital, and currencies has fundamentally changed the rules of the game in economic development. The problem is quite simple: Most federal programs for economic development were written for the economy of the 20th century, not the 21st century. Drabenstott examines how federal policy might shift to align with the new global economy. First, he summarizes the current federal role in economic development. Second, he describes the evolution in economic development thinking. Third, he explains why three shifts in federal policy will be important if the nation wants to help regions hone their competitive edge.