Self-Organizing Governance of Local Economic Development: Informal Policy Networks and Regional Institutions

This study examines the challenges that competition can bring to cities' efforts at economic-development collaboration.
August 2, 2017

Self-Organizing Governance of Local Economic Development: Informal Policy Networks and Regional Institutions

Christopher V. Hawkins, Qian Hu, Richard C. Feiock

Journal of Urban Affairs

Volume 38, Issue 5, December 2016

Description:

This study examines the nature of informal policy networks and their effect on economic-development agreements. Economic development is defined in this study as land development and capital improvement strategies, including site preparation, infrastructure and utility expansion, and building construction. Because city governments are the "primary unit of government with authority over land use … they have profound effects on how a community and a metropolitan area grow and develop over time," the authors write. Compounding this, the authors observe that intercity competition is especially prevalent in the United States. For metropolitan areas, these factors result in a patchwork of local regulations and development strategies that often leads to inefficiencies and makes collaboration among municipalities all the more imperative.

Findings:

The authors' survey of all cities in the Orlando, Fla., metropolitan area confirms their hypothesis that informal interactions strengthen formal agreements between city governments in economic development by building social capital and credible commitment, which reduce the uncertainty and risk that accompanies collaboration. Further, informal network relations have the most potent effect on formal agreements when cities have a "common tie with an organization that serves a collaborative role in metropolitan governance." However, the authors write, this effect is weakened when cities have "a common tie to a competitive regional organization."

Why this matters to practitioners

The authors conclude that city governments in metropolitan areas can benefit from both informal networks and regional institutions but that these cities "need to be cognizant of the challenges that intensified competition can bring to collaboration." It is important, the authors write, to evaluate whether engaging with a specific regional institution "will support collaboration or provide resources that typically align with competition."

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