Renewing Citiesby Ross J. Gittell
The cities of Lowell and New Bedford in Massachusetts, Jamestown in New York, and McKeesport in Pennsylvania have all undergone years of adversity and decline, their economic bases having been badly damaged by structural changes in the national economy, particularly in the manufacturing sector. In situations like these, can local development efforts make a difference?… See more details below
The cities of Lowell and New Bedford in Massachusetts, Jamestown in New York, and McKeesport in Pennsylvania have all undergone years of adversity and decline, their economic bases having been badly damaged by structural changes in the national economy, particularly in the manufacturing sector. In situations like these, can local development efforts make a difference? Ross Gittell answers in the affirmative. This interdisciplinary work focuses on comparative case studies of the four cities. The book reveals how public, private, and community-based local economic development initiatives affect local economic performance: what works and what does not work. City leaders and institutions can help reorganize and "reshuffle" local resources, with results that include increased investment, greater effort by local individuals and institutions, more cooperation among different development interests, and improvement in city economic positioning relative to the regional economy and local development cycles. Gittell emphasizes the possibility of shifting from a "zero-sum game" (attracting jobs from elsewhere) toward the goal of converting underutilized local resources to higher-value uses through alternative forms of economic and political organization.
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By Ross J. Gittell
PRINCETON UNIVERSITY PRESSCopyright © 1992 Princeton University Press
All rights reserved.
Renewing Industrial Cities
Much of the literature on managing the economy focuses on the role of the federal government and, increasingly, on the role of state governments. However, the macroeconomic policies of the federal government and the specific development initiatives of state governments are not the whole story of economic management. Throughout the country, city government officials, together with business and citizen groups, are actively engaged in local economic development. In some cases, local intervention in the economy seems to promote success; in other cases it fails.
There is inadequate understanding of the nature of successful local development efforts. This is unfortunate, particularly given the priorities of Federal administrators in the 1980s and early 1990s, changing relations between the private and public sectors, and the increase in community-based development activities. The "new" New Federalism of the Reagan and Bush administrations (which moved policymaking responsibility from the federal to the state and local levels)—together with the proliferation of public and private development partnerships and community development corporations (CDCs) in cities throughout the nation—strongly suggest the relevance of local development practice and policy.
This study involves an interdisciplinary examination of the effect of public, private, and community-based local economic development initiatives on local economic performance, with a particular focus on how local development processes influence city capacity for economic regeneration. It includes assessment of the influence of local civic and corporate organization on aggregate output and productivity in four medium-sized (populations of approximately 25,000 to 110,000), declining industrial cities in the northeast United States—Lowell and New Bedford, Massachusetts, Jamestown, New York, and McKeesport, Pennsylvania.
Inductive theory building is pursued. This is in contrast to hypothesis testing, which is the method employed in much of the analysis of local development. Detailed "case studies" describe and compare local development practice in the four study cities in an effort to uncover what is going on, what works, and what does not work. Hypotheses are developed regarding the influence of various agents in local economic development and tested against the data and observations from the case studies. Discussion of the "standard" quantifiable determinants of local growth—such as industry mix, national and regional employment change, and local business costs—is supplemented with discussion of less tangible local factors, including corporate civic involvement, labor and management relations, political leadership, and local citizen participation.
Perhaps the principal contribution of this study is to suggest a shift in policy attention in local economic development from what has been described as the "zero-sum game" of attracting jobs from elsewhere, towards the goal of converting underutilized local resources to higher value uses through alternative forms of social, political, and economic organization. The analysis of economic revitalization efforts in the four industrial cities indicates that local economic intervention matters. It is suggested that under certain conditions city leaders and institutions can facilitate beneficial adjustment to changing economic circumstances through "reshuffling" and reorganization of local resources.
The analysis indicates that it is important to understand more than markets and factor prices to make sense of and usefully guide local economic development practice. The roles of various motivating, diagnostic and organizing agents are highlighted, including development strategies, local leadership and public, private, and community group cooperation. It is suggested that the benefits from effective, locally based development initiatives can include increased inputs, investment, and effort by local individuals and institutions; greater and more efficient cooperation among different development interests; and improvement in city economic positioning relative to the regional economy and local development cycles.
The inquiry is divided into three main parts—theoretical review, detailed empirical study and conclusions. Chapter 2 reviews economic and political theories relevant to analysis in subsequent chapters. Chapter 3 provides a statistical baseline for the case study analyses of development efforts in the four cities, which follow in chapters 4 through 7. Chapter 8 synthesizes and further considers the hypotheses from the case studies. The final chapter, Chapter 9, suggests strategic and managerial guidelines for local development efforts.
The theoretical review in Chapter 2 suggests the value of interdisciplinary inquiry and offers a conceptual framework for consideration of the influence of local initiatives in economic development. The first part of Chapter 2 summarizes various economic theories of urban and regional change and the location of economic activity. Shift-share, factor price equalization and location theories are reviewed and their value in informing local economic development practice is examined. Three dynamic theories of regional change—product, process, and factor price life cycle—are suggested as most relevant to understanding the linkage between local development acts and local economic performance.
The second part of Chapter 2 examines political and public choice theories of local development practice and collective action. Paul Peterson's city limits theory is compared and contrasted with growth, regime politics, and dependent city theories of urban growth and decline. Theories of collective action and cooperation by Mancur Olson, Robert Axelrod, and Jane Mansbridge are also presented and related to concerted local development efforts.
Chapter 3 provides a statistical baseline for the case studies (i.e., city development analyses). The economic development histories of Lowell and New Bedford and Jamestown and McKeesport are compared and contrasted. The intent is to isolate the points in time when local efforts may have had a particularly significant effect, either positive or negative, on economic development in the four cities. The study cities are "paired-up" to control for cost and other regional factors that may influence local economic development. Shift-share analysis is employed to identify the effects of national and regional industrial trends.
Differences in local economic performance, as measured by employment change, in the paired cities are identified even after controlling for the effect of base period industry mix and other standard regional development factors. Lowell, compared to New Bedford, achieved significant employment growth in the late 1970s and early 1980s. Similarly, Jamestown, when compared to McKeesport, experienced significant economic vitality in the 1970s that cannot be fully explained by standard theories alone. These findings suggest that the late 1970s and early 1980s in Lowell and New Bedford and the 1970s in Jamestown and McKeesport might be appropriate times to look beyond shift-share and other traditional regional development factors and focus on the potential role of city-based development activities.
The focus of the analysis in Chapter 3 is on changes in total and manufacturing employment. Employment trends are a common and useful measure of city well-being. Manufacturing employment is particularly relevant to cities, such as the four study cities, whose development is closely linked to changes in manufacturing employment. However, employment trends are a limited indicator of development success. The discussion of employment (in Chapter 3 and in the city development analyses) will be supplemented by consideration of "other" measures that indicate city vitality and development success—including population change, median family income, levels of educational attainment, and unemployment rates.
In Chapters 4 through 7, detailed comparative study of development efforts are undertaken, focusing on the time periods and industrial sectors suggested by the analysis in Chapter 3. The different political and economic theories introduced in Chapter 2 are applied in the city development analyses to help explain changes in the economies of the four study cities. The case analyses attempt to illuminate and evaluate local efforts in economic development—quantifying, whenever feasible, their net local effects. The comparative studies make an effort to assess the influence of local development initiatives in a comprehensive manner. They explore not only direct economic impacts of local development efforts but also indirect effects, including (1) how organized local development activities affect individual and organizational psychology and behavior and community attitudes regarding development and (2) how changes in these may influence city economic positioning and the timing of local economic change and growth.
Each city development analysis documents selected locally based development initiatives and assesses their effect on a variety of factors: the local institutional, financial, social, physical, and intellectual capacity; the attitudes (psychology) and behavior of individuals and organizations in the community; and city positioning in product, process, and factor price cycles. The city studies consider the influence of local initiatives against a "base case"—what might have happened in the absence of city-based development activities. The city development analyses are not meant to test the relative merits of different political and economic theories, but to gain insight to how local initiatives influence local economic performance.
The city development analyses suggest that the organization and management of local development activities can make a difference. Lowell and Jamestown, compared to New Bedford and McKeesport, appear to have undertaken local development initiatives that have had positive economic influence in these cities. In Lowell, key local development factors appear to include local political leadership, the creation of a pooled fund among local banks for financing development projects, and the formation of a public-private partnership to guide and support development and promote the city. In Jamestown, the key local development initiative appears to have been the formation of a city-wide labor-management committee to foster cooperation between labor and management, facilitate improvements in worker productivity, and support city-wide training and industrial development opportunities.
Chapter 8 summarizes and evaluates the hypotheses generated from the case studies. First the findings from the city studies are reviewed. Then the key conclusions are considered in light of recent pronounced change in one of the study cities, Lowell. Finally, the development hypotheses are considered with regard to theories of local market failure to suggest a framework for generalizing the findings from the city development analyses. It is suggested that (1) local market and government failures can restrict the potential for private market activities alone to stimulate the revitalization of depressed cities and (2) that benefits may be derived from selective organization of city development activities outside of the market and local government.
The concluding chapter, Chapter 9, summarizes the discussion of the previous chapters and proposes strategies and management guidelines for local economic development. It highlights the role of various motivating, diagnostic, and organizing agents in local economic development, including city development strategies, local leadership, institutional innovation, and cooperation among public and private sectors and community groups.
The analysis concurs with much of the conventional wisdom—that the context in which local economic development efforts take place is in large part determined by outside influences, including international, national, and regional industrial, economic, and political factors. It is argued, however, that a city's development is not determined by outside forces alone. It appears that local organization and management of development activities can effect local economic outputs. The key benefits that can be derived from effective organization and management of locally based development efforts appear to be improvement in city economic positioning, increased effort by local individuals and institutions, and greater and more efficient cooperation among different development interests.
An Introduction to the Case Study Cities
There are a great variety of experiences with local development efforts. The cities selected for detailed study, Lowell and New Bedford, Massachusetts, Jamestown, New York and McKeesport, Pennsylvania, were purposely selected. They are of similar size, with populations ranging from approximately 25,000 to 110,000. All emerged as manufacturing centers isolated from larger metropolitan areas during the nineteenth and early twentieth century, and they all endured periods of growth and decline yet remained primarily industrial cities (with employment concentration in manufacturing 50 percent greater than the United States average), in spite of historical concentration in employment in declining U.S. industries. Each of the study cities has recently confronted, with varying degrees of success, "turnaround" situations in which attempts have been made to recover from an extended period of economic decline and significant loss of base industry employment.
To date, there has been relatively little discussion of economic development in smaller cities, such as the ones selected for detailed empirical inquiry here. Much of the detailed analysis of local development efforts has considered efforts in larger cities and metropolitan areas. Smaller jurisdictions are valuable to study not only because a significant portion of the population resides in areas of this type (approximately 15 percent of the U.S. population in 1980 lived in cities with populations between 25,000 and 100,000), but also because development cycles tend to be highly visible and pronounced in these jurisdictions. The influence of local development efforts on local economic performance and, particularly, on the nature and timing of local development cycles may be more easily observed and analyzed in smaller industrial cities than in larger metropolitan areas, which have more diversified economies and more complex networks of development factors to account for.
An advantage of "honing in" on the development problems of a limited number of medium-sized cities is that the analysis can more easily extend beyond tangible factors and quantifiable effects of local development initiatives. Many studies of development in larger cities and metropolitan areas are highly dependent on aggregated economic data and have great difficulty considering how intangibles—such as local culture, political organization, and public and private institutional capacities—might influence economic change. Case study of development in four smaller cities can explore in detail how subtle factors in local development efforts may affect community psychology, as well as the attitudes and behavior of individuals and organizations, and how changes in these may affect city economic positioning.
Although the study focuses on turnaround situations in medium-sized industrial cities, some of its findings may be relevant to economic development in other areas, including larger metropolitan areas and inner city neighborhoods. Similar to larger cities and neighborhoods in inner cities, industrial cities have suffered not only from employment decline but also from social, political, and cultural upheaval involving the dislocation of individuals, the separation of families, and the loss of a sense of community.
Excerpted from Renewing Cities by Ross J. Gittell. Copyright © 1992 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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