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Cities and Economic Development: Does the City Limits Story Still Apply?

Author

Listed:
  • Victoria Basolo

    (University of California, Irvine)

  • Chihyen Huang

    (Feng Chia University)

Abstract

The dominant explanation for city policy choices over the past two decades has been the city limits story. This scenario represents the application of public choice theory to local policy making. Theorists argue that rational self-interest by cities compels local elected officials to favor developmental policies and compete with other jurisdictions. Inefficient economic development outcomes and evolving trends in the practice of economic development prompt a reevaluation of the city limits story as the primary explanation for economic development policies. This research investigates the influence of intercity competition and other factors on the support for economic development by cities. Results from regression analyses using data from a sample survey of U.S. local economic development professionals reveal virtually no support for the city limits story. However, the population needs within cities, the support of elected officials, and the existence of formal economic development planning did influence support for economic development.

Suggested Citation

  • Victoria Basolo & Chihyen Huang, 2001. "Cities and Economic Development: Does the City Limits Story Still Apply?," Economic Development Quarterly, , vol. 15(4), pages 327-339, November.
    • Handle: RePEc:sae:ecdequ:v:15:y:2001:i:4:p:327-339
    DOI: 10.1177/089124240101500407
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    References listed on IDEAS

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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    2. Laura A. Reese, 1999. "Modeling Economic Development Decision‐Making: The Case Of Tax Abatements," Review of Policy Research, Policy Studies Organization, vol. 16(2), pages 175-193, June.
    3. Peter S. Fisher & Alan H. Peters, 1998. "Industrial Incentives: Competition among American Cities and States," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ii, November.
    4. Laura A. Reese & David Fasenfest, 1997. "What Works Best?: Values and the Evaluation of Local Economic Development Policy," Economic Development Quarterly, , vol. 11(3), pages 195-207, August.
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    Cited by:

    1. Michael R. Betz & Mark D. Partridge & David S. Kraybill & Linda Lobao, 2012. "Why Do Localities Provide Economic Development Incentives? Geographic Competition, Political Constituencies, and Government Capacity," Growth and Change, Wiley Blackwell, vol. 43(3), pages 361-391, September.
    2. Eben Fodor, 2012. "Relationship Between Growth and Prosperity in the 100 Largest U.S. Metropolitan Areas," Economic Development Quarterly, , vol. 26(3), pages 220-230, August.
    3. Linda Lobao & David Kraybill, 2009. "Poverty and Local Governments: Economic Development and Community Service Provision in an Era of Decentralization," Growth and Change, Wiley Blackwell, vol. 40(3), pages 418-451, September.

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