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A History of American State and Local Economic Development: As Two Ships Pass in the Night

Author(s):Coan, Ronald W.
Reviewer(s):Stabile, Donald R.

Published by EH.Net (June 2017)

Ronald W. Coan, A History of American State and Local Economic Development: As Two Ships Pass in the Night. Cheltenham, UK: Edward Elgar Publishing, 2017. xii + 735 pp. $210 (hardback), ISBN: 978-1-78536-635-2.

Reviewed for EH.Net by Donald R. Stabile, Department of Economics, St. Mary’s College of Maryland.

In this very lengthy book, Ronald W. Coan offers a history of the economic development programs, plans and agencies used by states and local communities to nurture the economic development of their geographic regions. He holds the rich details of that history together through his use of a policy-making model that he elaborates in the first chapter and makes use of throughout the book. The model is complex, because economic development policies at the local level have many goals. They also vary greatly from one locality to another.

The book is organized into three parts for a total of twenty chapters. Coan explains his model in the first chapter of Part I. He starts with three characteristics of the profession of local economic development: “onionization” through the increase of layers of policy as new agencies are added to implement another program without elimination of older agencies, “siloization” from each agency focusing on one aspect of economic development, and “bifurcation” with the profession split into practitioners in the field and policy formulators in academia and think tanks. These policy formulators and implementers work in a context of the economic pressures that define their work. The most important is the cycle of industry profitability as industries start from the early days of innovation, grow to become mature and then potentially decline. Economic development professionals must cope with a world where the economic base of their locality is changing. Another pressure economic development professionals must deal with is shifts in population, from immigration and internal migration as happened in the U.S. in a process of city building. When cities developed, moreover, they produced hierarchies where established cities competed with emerging cities and all cities functioned at the lower end of a legal system headed by state and county governments. These hierarchies also generated economic and political elites with vested interests in economic development that differed. States, counties and cities are also divided into different legal jurisdictions with different policy goals. The main split in policy goals Coan finds is between Privatism, the belief that in a capitalist economic system development depends on using private sector values and agencies, and Progressivism, the principle that economic development generates inequalities that the government should remedy. The former represents a push for jobs while the latter embodies the nurturing of a community comprised of humans with social needs and ambitions. Coan thus divides his history into economic development versus community development — the two ships that pass in the night of his subtitle. Given that the professionals who favor one approach or the other have a variety of programs, strategies, tools and skills to use in developing policies, at the local level Coan finds a large variation in the way his policy-making model has been applied during U.S. history.

The rest of Part I gives the history of the early days of economic and community development, from the colonial period through the 1920s. The period was marked by a focus on Privatism, with business organizations such as a chamber of commerce taking the lead and cooperating with government through private-public hybrid agencies with a focus on economic development. Community development also existed through the work of churches and later from the settlement house movement. Part II describes a period of transition where the federal government became involved with economic and community development as Roosevelt’s New Deal began intervening in the economy during the Great Depression. The New Deal and World War II changed the economic landscape of the U.S. due to the parts of the country, particularly the South and West, where the federal government located its programs (such as the TVA) and its investment in defense production (such as aircraft manufacture). New cities arose in those regions and by competing for industries to locate in the region ended a century-long hegemony of the urban centers of the Northeast and Midwest, creating several waves of internal migration from south to north, east to west and eventually north to south. Part III brings the history into the present, an era where the federal government has reduced its economic and community development efforts and the states have moved in to take up the slack.

This brief summary does not do justice to the richness of detail that Coan provides. It is also a great deal of information to absorb in a single reading—each of the three Parts could have been a separate book. Still, I found it worth making the effort, as Coan weaves in the familiar material of the big picture of U.S. economic history with many case studies of local jurisdictions formulating policies for economic development and community development. My one quibble is that Coan overdoes it with his split between economic development and community development; my research indicates that Progressives believed that their focus on the development of human capabilities would add to economic development, although I would agree with Coan that the two sides did not always recognize it. Coan aims the book at economic development professionals to teach them the history of their expertise but economic historians can also benefit from reading it.

Donald R. Stabile is professor of the college at St. Mary’s College of Maryland. His most recent book is The Political Economy of a Living Wage: Progressives, the New Deal and Social Justice, New York: Palgrave Macmillan, 2016.

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Subject(s):Economic Planning and Policy
Urban and Regional History
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII