Local economic development programs can and should be more rigorously
evaluated, argues Timothy J. Bartik, a senior economist with the W.E.
Upjohn Institute for Employment Research, in a recently released working
paper, Evaluating the Impacts of Local Economic Development Policies
on Local Economic Outcomes: What Has Been Done and What is Doable?
Bartik defines “local economic development programs” as
programs that provide business assistance that is more or less customized
to the needs
of the businesses they serve, with the immediate goal of increasing business
activity in the local economy. He asserts that in the United States, rigorous
evaluations of these programs do occur, but they are the exception to the rule.
And, in far too many cases, state and local economic development organizations
claim credit for any state and local job growth, even if some would likely have
occurred without the organizations.
Evaluations should instead try to determine how local economic outcomes would
differ if a given program didn’t exist, Bartik explains. Beyond that, understanding
how and why the program works is also critical in order for improvements to be
made. Therefore, evaluations should include estimates of how program impacts
might change with a variation in the program’s structure or administration.
Bartik outlines various ways in which more rigorous evaluations can be performed,
including surveys, focus groups and statistical analyses of economic outcomes
in firms or areas using the programs. He suggests, however, that more rigorous
evaluations are unlikely to occur without outside pressure and funding from legislatures,
governmental audit bureaus and higher levels of government.
One of the reasons rigorous evaluations are infrequent is the fear that negative
evaluations will be used as an excuse to terminate a program, Bartik says. Rigorous
evaluations are more likely to occur if the results are more frequently used
to improve programs rather than kill them. If the basic rationale for a program
makes sense, then negative evaluation results should be used to motivate the
creation of a new approach to addressing the problem, he concludes.
Visit www.upjohninst.org/publications/wp/03-89.pdf to
download a copy of the
paper in PDF format.—Kathy Cammarata
