Week 2: History, Concepts, Politics

1. Prof. Scott Campbell Urban Planning 539 University of Michigan http://www-personal.umich.edu/~sdcamp/up539/ Week 2: History, Concepts, Politics

2. In-class small group exercise ANSWERS to the question ….. • Form groups of 4-6 students and discuss and answer these questions: • Identify at least 3 ways that local economies differ from national economies • What are the implications of your answer to Q1 on how localities and regions can and should respond differently to the current economic crisis? • 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 _____________________”.

3. 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 public-private partnerships, in business-like tools, etc.

4. 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.)

6. 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.

8. 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).

9. 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

10. 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

11. Another historical view…. Fitzgerald, Joan and Nancey Green Leigh. 2002. Economic Revitalization: Cases and Strategies for City and Suburb. Sage. pp. 10-26

12. Multiple Strategies and ... • 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 • Multiple Goals • Employment • Higher wages • Lower poverty • Reduce inequality • Increase human capital • Increase living conditions • Job attraction and retainment • Capacity building • Increase multipliers • Sustainable growth

13. Twenty Really Useful Concepts in Understanding Local Economic Development • linkages (forward and backward) • location theory • market failure • multiplier (and basic vs. non-basic employment) • opportunity costs • public-private partnerships • spatial division of labor • supply-side vs. demand-side approaches • value added • zero-sum game • agglomeration economy • cumulative causation vs. equilibrium models • cyclical versus structural change • deindustrialization • equity vs. efficiency • Externalities (both positive and negative) • “leaky bucket” theory of money flows in local economies • globalization • growth vs. development • innovation (process versus product)

14. 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 c-tools "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]