Exploring the Trade-Offs Local Governments Make in the Pursuit of Economic Growth and Equity

Abstract

Economic development at the municipal level often necessitates that local governments make trade-offs between firm- and locality-based strategies. In recent decades, economic development researchers have described these efforts over time as exhibiting certain patterns and metaphors: as a series of waves, as embodying a type of lock-in effect, and as a policy layering process; however, the mechanisms behind these patterns remain unclear. This article draws upon 30 years of economic development policy decision making across the United States to understand what leads local governments to prioritize growth- or equity-oriented policies. We find that equity-enhancing economic development policies are more likely when local governments face less competitive pressure, have greater resource capacities, and experience greater intergovernmental involvement in the economic development planning process. Leveraging these factors can aid governments as they struggle to navigate a more sustainable path toward growth and equity.