Friday, September 22, 2006

Regionalism and Economic Development

"The markets from which employers draw their workers, from which companies draw their suppliers, from which retailers draw their customers ... all of these are regional. There's a regional housing market, in which the supply and prices in one area affect the supply and prices in another. And in the competition for top talent from around the world ... it is the region's offerings of airports, universities, sporting and cultural venues, restaurants and recreational possibilities that are considered, not those of any one location."
A quote about the Pittsburgh Region?

It could be, but in fact, it's from a September 15 Washington Post column about the Washington, DC area called Living Regionally, Thinking Locally.

The author, Steven Pearlstein (the Post's business and economy columnist), goes on to say:

"To the degree the economy is regional, so are its problems -- transportation gridlock, the lack of affordable housing, the skills mismatch between what companies need and what workers can offer. And yet, with the exception of Metro and the airport authority, most of the regional mechanisms and institutions we have for addressing them are either weak and ineffective, or are yet to be developed.

Consider, for example, that while all of the region's suburban jurisdictions have active programs to attract new jobs and commercial development, most would prefer that the people who will hold those new jobs and shop in those new stores live somewhere else. The reason is simple: Jobs and office buildings generate lots of tax revenue but little new demand for government services, while new housing developments, and the school-age children that come with them, are often net drains on a county treasury.

Obviously, if every jurisdiction plays this game, you end up with sprawl, which is precisely what has happened. The only way to avoid this is to have mechanisms by which neighboring jurisdictions share in the costs and benefits of economic growth, giving them the financial incentive to cooperate rather than compete.

You could substitute the word "Pittsburgh" for "DC" in most of the places in the story and it would apply here. Competition among jurisdictions for jobs. Weak regional institutions. The need for financial mechanisms to promote intergovernmental cooperation.

Pearlstein concludes by saying:

This inability to think and act regionally is now the central challenge for the Washington economy...[but it] is unlikely local officials will step forward to lead this march toward regional governance -- most of the political incentives militate against it. The push will have to come from a business community that has the most to lose from no-growth policies, but itself remains largely balkanized along industry and political lines.


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