The Role of Local Government in Contemporary Economic Development

The purpose of this paper is to review the role sub-national governments play in contemporary economic development, with particular reference to the United States. In the United States, municipal (local) governments play a central role in land use policy (often following model state legislation) and the provision of common infrastructure. County, multi-county, and other regional governments are central actors in the U.S. in other areas of economic development. The intergovernmental distribution of responsibilities differs from country to country elsewhere in the world, but with few exceptions, there are important roles for sub-national governments in land use and other aspects of economic development policy. A common theme internationally, then, is that there is increasing competition within and between countries for economic activity – especially for higher-skilled and better-paying jobs. That is entrenched in the structure of most governments, where responsibility for various important functions is devolved to the state (prefecture, Länder, cantons, etc.), regional and municipal levels. The advisability of this competition is open to debate, but it is a feature of most governments that will continue to at least 2015.