Transcript up539 w09 background..

Prof. Scott Campbell
Urban Planning 539
University of Michigan
http://www-personal.umich.edu/~sdcamp/up539/
Week 2:
History, Concepts, Politics
In-class small group exercise ANSWERS to the question …..
Form groups of 4-6 students and discuss and answer these questions:
1.Identify at least 3 ways that local economies differ from national
economies
1.What are the implications of your answer to Q1 on how localities and
regions can and should respond differently to the current economic
crisis?
1.Complete the following sentence: “The Southeast Michigan
economy, currently suffering from the near-collapse of the auto
industry, high unemployment, stagnant population growth and
depressed housing values, will experience a resurgence in growth and
vitality in the coming years only if _____________________”.
Understanding this relationship through the history of
urban planning as a profession
•The shift to the social sciences away from architecture
•The history of housing reform and social activism in planning
•The roots in the New Deal, and Depression-era priorities on
job creation and poverty.
•The difficulty of helping the physical neighborhood without
helping its economy.
•The shift away from government programs making economic
development more entrepreneurial, more involved in publicprivate partnerships, in business-like tools, etc.
the frustration of the field
•hard to know if serving the public interest, or just business
-- is one giving away more than necessary to effect
change?
•Limited resources to tackle massive, complex problems
•hard to just the impacts of the work
•inefficiencies of the programs
•often difficult to generalize (or clearly define reproducible
“best practices”)
•Skepticism from some others in the field (e.g.,
environmentalists, community activists)
(can it be otherwise? Can it be made more a science? Or because planners
are but one player with limited tools in a complex, open-ended politicized effort,
the process will invariably be more complex.)
Com m o n c ri t i c ism s o f loc al e c ono mi c de v el op m e n t :
1. a wa st e o f m o ne y
2. a t b e s t a z er o s u m g a m e
3. d is t o rt s th e o p tim al o ut c o m e o f th e f ree ma rk e t ( subo p t in al
o ut c o m e s )
4. am ou nt s t o a f re e g ive aw a y to b usi nes s e s ; at b e s t , w e llin t e n ti o n e d ; at w o rs t , b rib e s a n d kic kb a c k s .
5. inef f i c i e nt ( es p. sm al l sc al e o p er a t i on s )
6. b e ne f i t s to fir m g re at e r th an b e n e f its to s o c i et y .
7. lead s t o e v e n m o re u n e q u al di s t ribu ti o n o f reso u rc e s .
8. w ron g o n pri n cip le: gov e rn m e n t sh oul d n o t g et inv o lv e d in
t he pr iv ate se c t o r.
9. b e ne f i t s h e lp o u t si d er s , n o t th e c o m mun i t y re si d e n t s
t h em s e lv e s .
But also the rewards
•Creating jobs for people in need; Helping those who fall
between the cracks of the market
•Stimulating other planning benefits: such as more
resources for street projects, housing, etc.
•Often other planning tools (land use, urban design,
transportation, etc.) can only work well if the economic
development tools are in place
•Addressing the huge inequality that is place-based: city
suburb, urban rural, north south, 1st vs. 3rd world.
PRO ECONOMIC DEVELOPMENT
PLANNING
CONTRA ECONOMIC
DEVELOPMENT PLANNING
Market f ailu res: public goods,
prisoners dile mma, risk and
uncertainty; lack of i nformation;
externalitie s.
Creates market inefficiencies
Market optimality ­ social
optimality.
[cite Fogelsong's property
contradiction; also: the need for
zoning.]
Inequitie s require intervention
Infringement on individual
freedoms (laissez-faire)
Public-private partnerships
(broadly defin ed) are needed in a
mixed social economy.
Creates opportunities for
corruption, exploita tion. Adds
an extra layer of c ost.
Citi es "compete" like firms, so
you either have to play the game
or lose out. [compare to Tiebout
idea]
One can't "pick winners"
As the economy becomes more
technologically and
organizationally complex, more
planning -- both public and
private -- is required.
The market is more
sophisticated and dynamic and
fast moving than any govt can
be; EXAMPLE: Sili con Valley
was not c reated by public
planners.
historical evolution of the field
from not part of planning, to one specialization, and for
some even another step: as an integral part of planning
or even as a new core of planning (though this likely a
minority view).
Recent roots: dealing with deindustrialization, the
retreat by the government in traditional urban renewal
funding; the need for partnerships and public-private
entrepreneurship; persistent income inequalities;
global competition and the great pressures on
communities; a blurring of public and private roles (so
that the public sector sees economic activity as more of
its domain).
THEMES by Era (partial list):
1930s Keynesian New Deal policies to stimulate demand and create jobs
1940s wartime mobilization and postwar adjustment, conversion of military
capacity; deconstruction of New Deal policy interventions
1950s industrial expansion; suburbanization; highway building; Cold War;
anti-communism taints planning; US dominant in the world market.
1960s beginning of the structural crisis; early days of deindustrialization;
white flight from cities;
1970s plant closures (and legislation); the rise of services.
1980s high tech, flexible specialization, post-Fordism; Sunbelt over
Frostbelt; public-private partnerships; post Great Society downsizing of
government.
1990s globalization; capacity building; entrepreneurship; boom in
construction; high-tech expansion; biotech
2000s neo-liberalism; sustainability; rise of China; Internet commerce;
financial crisis; housing crisis
Three Waves of Economic Development
Source: Blakely, Edward J and Ted K Bradshaw. 2002. Planning Local Economic Development Theory
and Practice: Third Edition. Sage. Page 45: Table 2.3
Component
First Wave
Second Wave
Third Wave
Location assets
Discount them to
attract outside
business
Reduce taxes
and provide
incentives to all
businesses
Build regional
collaboration
Business focus
Outside firms
Assist all local
firms
Create context
for better
relations among
firms
Human
resources
Create jobs for
local
unemployed
people
Develop training
programs
Utilize workforce
training to build
businesses
Community
Base
Physical
resources
Social and
physical
resources
Leadership and
development of
quality
environment
Another historical view….
Fitzgerald, Joan and Nancey Green Leigh. 2002. Economic Revitalization: Cases
and Strategies for City and Suburb. Sage. pp. 10-26
PHASE
Selective characteristics
1. State Industrial Recruitment (starting in the
1930s)
Create good business climate (taxes, loans,
infrastructure, etc.) • “greasing the skids” for
business • corporatist paradigm
2. Political Critiques of Local Economic
Development Activity (starting in the late 1960s)
Focus on who is paying and who benefits. ED
actors as political agents • political economic
analysis • critique of “smokestack chasing” •
recognition of tension between footloose capital
and communities •
3. Entrepreneurialism and Equity Strategies
Two separate movements: Promoting high tech
(mimic Silicon Valley) and pushing
equity/redistribution (e.g., Mayor Harold
Washington’s initiatives in Chicago, 1980s).
4. Sustainability with Justice
Balancing economic development, social justice
and environmentalism. Brownfield development.
5. Privatization and Interdependence
Market solutions (e.g., Michael Porter’s
competitive inner cities) and regional/metropolitan
strategies.
Multiple Strategies and ...
Multiple Goals
Boosterism, Place Marketing
Investing in comparative advantages
Human capital development
Developing markets
Creating clusters, agglomeration
economies
Infrastructure (physical, technical,
social)
Smokestack chasing, Business
attraction: taxes, etc.
Partnerships
Employment
Higher wages
Lower poverty
Reduce inequality
Increase human capital
Increase living conditions
Job attraction and retainment
Capacity building
Increase multipliers
Sustainable growth
Twenty Really Useful Concepts in Understanding Local
Economic Development
•agglomeration economy
•cumulative causation vs.
equilibrium models
•cyclical versus structural change
•deindustrialization
•equity vs. efficiency
•linkages (forward and backward)
•location theory
•market failure
•multiplier (and basic vs. non-basic
employment)
•opportunity costs
•Externalities (both positive and
negative)
•“leaky bucket” theory of money
flows in local economies
•globalization
•growth vs. development
•innovation (process versus
product)
•public-private partnerships
•spatial division of labor
•supply-side vs. demand-side
approaches
•value added
•zero-sum game
The readings for this week:
Jan 13: History, Concepts and Politics I
•Richardson, Harry. 1979. “Introduction,” Regional Economics. pp.17-37. [c-tools] save for
later.
•Krugman, Paul. "Localization," in Geography and Trade. Cambridge, Mass. MIT Press, 1991,
pp. 35-67. [Library reserves]
•Glaeser, Edward L. "Why Economists Still Like Cities." City Journal, Vol. 6, No. 2, 1996, pp.
70-77. [Library reserves]
•Flammang, R. A. 1979. “Economic growth and economic development: Counterparts or
competitors?” Economic Development and Cultural Change 28, 47-62 [c-tools] -- NOTE: in ctools "Resource" section
Jan 15: History, Concepts and Politics II
•Wolman, Harold, and David Spitzley. "The Politics of Local Economic Development."
Economic Development Quarterly, Vol. 10, No. 2, May 1996, pp. 115-150. [Library reserves]
•Fitzgerald, Joan and Nancey Green Leigh. 2002. “Introduction” and “Redefining the Field of
Local Economic Development.” In Economic Revitalization: Cases and Strategies for City and
Suburb. London: Sage Publications. [c-tools]
•Mier, Robert. Metaphors of Economic Development, in Bingham, Richard D., and Robert Mier,
eds. 1993. Theories of Local Economic Development. Newbury Park: Sage. (Chapter 14, pp.
284-304). [c-tools]