Cooperation and Competition

At one time local economic development was an almost entirely competitive activity, a sort of intermunicipality "war of all against all," to use a phrase Thomas Hobbes originally used in a very different context. But in recent years that has changed. For many municipalities, especially as regards manufacturing, the most serious competitor is not the next town or the next county, but a producer 10,000 miles away. As a result there are now a very large number of multijurisdictional agencies that seek to promote an area, rather than a single jurisdiction. These agencies may share advertising and public relations expenses and have a policy of seeking to guide prospective investors to whichever jurisdiction in the area best meets the needs of that investor. For such agencies the old habit of trying to seduce firms away from neighboring jurisdictions is no longer acceptable.

Pursuit of Investment by Higher Levels of Government

As do state governments, local governments also pursue investment by higher levels of government. Occasionally the higher level of government is the federal government. More often, it is the state government.

For example, many counties, particularly in rural or semirural areas, have decided that prisons make a good source of jobs. They are laborintensive activities, and employment in them is not subject to the vagaries of the business cycle. If there is a site that is suitable for a prison and not too close to a center of population, the municipality may well exert itself to get the next state prison built there. Other state facilities, too, may be the subject of considerable competition by local governments. Local governments frequently seek to influence federal and state investment in highways, since good highway access is often a necessary though not sufficient condition for attracting private capital investment.

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