New Horizons in Regional Science series
Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough
Chapter 15: Competition and Cooperation in Economic Development Among Local Jurisdictions in a Large Urban Area
Roger R. Stough, Rajendra Kulkarni and Jean H.P. Paelinck 15.1 INTRODUCTION It is well understood that public officials try regularly to attract economic activities to their jurisdictions that will produce jobs and wealth. At least two patterns of behavior are found in such efforts. These are: (1) ‘get those activities at all cost’ or the indiscriminant chasing of opportunities; and, (2) offering the available amenities to firms for which these amenities represent attractive location factors. The latter is consistent with the basics of traditional trade theory whereby regions (nations) build their economic base in consonance with the comparative advantage principle; the former does not support such consonance because what is sought is done so indiscriminately with no rule or guidance for selecting which firms to attract other than the raw pursuit of the job-creation goal. Despite the fact that very few jurisdictions align completely with either of these extremes, examples can be found both of competitive or even predator behavior on the part of local economic development officials and also of non-competitive or cooperative behavior. In reality, however, most jurisdictions operate from a stance of both cooperation and competition. This conclusion is underscored by a large body of literature on so-called industry or firm attraction and incentive policy and behavior (Fisher and Peters, 1998; Green, et. al., 1996; Hammer and Green, 1996; McEntree, 1997; McNickle, 1997; Peters, 1993; Sullivan, 2002; Sullivan and Green, 1999, Anderson and Wassmer, 2000; and, Wassmer and Anderson, 2001). It is also supported by works in...
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