Beyond Parochialism in Economic Planning
Now that's an article title to set the heart racing. Only a not-for-profit magazine could get away with offering readers more than 3,600 words on economic planning or privatization, but to wonkish me, Chicago Enterprise was The New Yorker.
Thinking about big issues always gives me a headache, which is why I was grateful to the experts convened by the University of Chicago and the Metropolitan Planning Council in 1989 as the first Chicago Assembly. For two days they, not I, grappled with the issues of economic development and employment. The result was not quite an economic-development policy but a set of propositions to guide such a policy. Two stand out as fundamental:
• Cooperation among governments is more productive than competition.
• There is no such thing as a local economy, only a single regional economy that has local effects.
Alas, regional cooperation toward economic development is easier to describe than prescribe. The political economy of northeast Illinois—served by (or perhaps suffering from) more than 1,200 units of government—is local and competitive.
The assembly affirmed that beggar-thy-neighbor economic policies don't work, warning, "Little net job creation accrues to the metropolitan region when its communities are pitted against each other." Beggaring thy neighbors may be lousy economic-development strategy but it works fine (at least for a while) when it comes to expanding the local tax base. Local "economic-development policies" thus come to be built not around job creation over the long term but the short-term fiscal needs of local governments—and thus the political needs of the people who run them.
Consider the Metropolitan Economic Development Alliance (MEDA). MEDA is a happy result of the new ecumenicity among the mayors of Chicago and its suburbs, a sort of Chicagoland equivalent of Vatican II. Its priorities remain parochial, nevertheless. MEDA's lobbyists in Springfield will carry a shopping list that includes income-tax surcharge allocations, state mandates and caps on local levies. These are issues of pressing relevance to the economics of the region's mayoral ranks but of dubious relevance to the larger economy.
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For decades, Illinois' 19th-century system of local government was merely inefficient; today, it is destructive. The urban development task force that the Illinois State Chamber of Commerce established in its policy work for the governor sounded an almost plaintive note in its final report. "There must be a way to . . . cross local jurisdictional boundaries," the members concluded, "without usurping the autonomy granted these jurisdictions by the state Constitution."
I know. I know. Traffic jams are no respecters of constitutional prerogatives. Neither are floods, garbage, or crime. The 1980s gave our municipal and county leaders an introductory course in interdependence, economic and otherwise.
Intergovernmental agreements (worked out separately or through membership in regional agencies and municipal associations) have become the standard means by which stormwater, congestion and solid-waste disposal are being dealt with on the subregional and county levels. Indeed, intergovernmental cooperation has become so routine that life for the public managers in greater Chicago has become one constant coffee klatch.
Do any of these voluntary arrangements offer a model for regional economic development? Romeoville and Bolingbrook negotiated a municipal government equivalent of the Camp David accords when they agreed to share infrastructure costs and revenues of a 243-acre industrial park planned for unincorporated land between them. And Prospect Heights and Wheeling entered into a similar venture to jointly own and manage Palwaukee Airport, thus saving it from closure.
Nevertheless, economic development is only slowly being added to the regional agenda. Successful intergovernmental ventures tend to be voluntary, subregional in scope, and focus on single issues, which makes them dubious vehicles for economic-development projects that are long-term and risky. Beth Ruyle, the executive director of the South Suburban Mayors and Managers Association, notes that MEDA members early on resolved to do only what they could agree to do. The problem is that what is agreeable is not always—indeed hardly ever is—what is necessary.
Even if voluntary intergovernmental projects weren't politically problematic, they would make dubious administrative vehicles for regional economic development. Make-do and ad hoc arrangements tend to acquire a fatal complexity as they ascend from municipal and subregional to bicounty and regional scales. (The executive committee of MEDA has 38 members!) Ruyle explains that confronting even one single issue regionwide will be "too cumbersome" because of the diversity of the area's economy and governments.
Yet, the state chamber of commerce has proposed to the governor a new Economic Development Policy Board that would itself be advised by regional bodies whose membership would include not only existing governments with local jurisdiction but not-for-profits (including environmental interest groups), businesses and industries, and colleges and universities. Such omnibus bodies are certain to contribute to regional growth, if only via the new meeting halls that would be needed to accommodate their members.
As advisory bodies, the chamber's proposed regional councils would be powerless to deal with the central dilemma in regionalization—how to get local governments to cooperate when it means giving up something as well as getting something.
For instance, everybody agrees that infrastructure improvements are essential and that planning (and thus funding) naturally enough should be done on a genuinely regional scale. But allocating infrastructure funds on the basis of regional need rather than local political clout is a dangerous political pothole. At best, the trading would move from the statehouse to the conference room.
In the absence of immediate and tangible rewards that might tempt them to cooperate in, say, the reallocation of state school funds on a regional basis, local governments must be compelled to surrender part of their sovereignty to some more competent body. But which one? The counties? Giving Cook County more power over infrastructure spending or schools would be like handing a loaded gun to a child. And it will be a long time before DuPage County politicians forget that Jack Knuepfer got bounced by the voters for doing precisely what the new regionalism demands—long-term local infrastructure planning and financing, for example, or the consolidation of administrative authority at the county level.
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Metropolitan Chicago has faced problems of regional scale before and usually the way to solutions was barred by just these sorts of political or fiscal roadblocks. The answer was to go around them, by setting up wholly new governmental entities. Do we not need an RTA or a Metropolitan Water Reclamation District devoted to economic development and equipped with its own revenue sources and limited authority to plan, approve and spend? Such a regional authority could exhort the timorous as well as gather data, inventory sites and do regional marketing and lobbying.
But those things aren't economic development, at least not by themselves. Any attempt to improve the region's economy will require enhancements in services, such as education, that are the ultimate responsibility of the State of Illinois. Only the state has the constitutional clout and the means to deal with all the items on the regional economic-development agenda, from higher ed to environmental regulation to transportation planning and school funding.
Read between the lines of reports from the state chamber, the Chicago Assembly and others and you can detect a plea for some entity that would consider not just economic development but land use, solid waste, infrastructure, environmental regulation, and education. If not executing policy, this agency should exercise a coordinating veto power over the agencies that do. To plan for economic development without tending to these issues, sayeth our wise men and women, is like planning for fire protection without addressing an inadequate water supply.
Indeed, the experts concur that economic development can't be separated from government. Pleasant and efficiently administered communities with good schools are the biggest economic-development asset a region can offer.
Sound economic-development policy is just good government by another name. This is a provocative insight and a depressing one, considering the Chicago area's good-government record. The regional economic-development agenda is thus both simpler and far harder than anyone thought a few years ago. Fix the schools. Restructure local government. Reinvent the tax system. The Chicago Assembly concluded that regional economic development does indeed present "unique opportunities . . . for positive cooperation among the region's communities."
The opportunities aren't so much unique as urgent. Just like a shipwreck creates "unique opportunities" for heroism. ●