A review of the federal role in regional economic development

Mark Drabenstott

in Monograph from Federal Reserve Bank of Kansas City

Abstract: Globalization is forcing regions throughout the nation to find new competitive niches in rapidly changing markets. The resulting quest for new economic engines is different in every region, driven by a region?s distinct economic assets and the specific markets it can tap. At the same time, economic experts have discovered a whole new set of strategies that offer the greatest potential in helping regions compete in the global marketplace. These new strategies focus more on the region itself, namely, helping entrepreneurs and skilled workers innovate and seize new market opportunities?an approach strikingly at odds with past strategies that often aimed at recruiting industrial facilities to a region. ; Amid these tectonic shifts in how regions grow their economies, federal policy for economic development goes on largely unchanged. The federal development effort is carried out through nine federal departments and five independent agencies, forming a sort of Rube Goldberg policy apparatus cobbled together over the past 50 years or so. There is no unifying purpose to this legion of federal programs. New questions are being raised about this policy apparatus, however. With big deficits in prospect for the federal budget, every federal program is under new budget scrutiny. The Administration?s recent proposal to redesign economic development grant programs in the federal budget was perhaps the first effort to call attention to how the federal government shapes regional economic development. It will not be the last. ; This report frames in broad terms what the federal government?s future role could be in regional economic development. Three steps are essential in framing that role. The first step is to confirm what regional development policy is today. The second step is to identify what makes regional economies grow in the 21st century. The final step is to consider how federal policy might change to help regions grow in the future.

Keywords: Regional; economics (search for similar items in EconPapers)
Date: 2005
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