Defining the path to growth: Small town governance and economic development in an age of globalization

Economic development policymaking and project delivery were examined in four small cities in two different U.S. states, in a research design that aimed to test the extent to which local and state differences in institutional and organizational arrangements in governance affects policy outcomes.;Research was conducted through several means. A total of 91 survey interviews were completed with community and business leaders in the four cities, which were chosen due to their blue-collar orientation and unfavorable economic and demographic statistics. The cities studied included Ely and Hibbing, both located in St. Louis County in the Taconite Assistance Area of northeastern Minnesota and therefore under the economic development umbrella of the Iron Range Resources and Rehabilitation Board (IRRRB); and Sterling and Rock Falls, both located in Whiteside County, Illinois.;Additional archival work included analysis of meeting minutes for city councils and commissions/committees in the four cities; analysis of newspaper coverage; review of consolidated annual financial reports; and review of other local and state records. The study comprehensively covers the decade of 2000 to 2010.;The findings revealed that institutional organization is highly important to the success of public sector efforts in economic development, and can add value to the process even when resources are extremely limited and competition for development from other cities intense. Reforms in governance, including passing managerial functions from city councils to bureaucracies, devolving economic development decisions from city councils to an independent commission or committee, and consolidating local government jurisdictions were all found to promote success in meeting local goals.;Additionally, state involvement was found to be significant, with the Minnesota cities achieving significant results on far smaller ED budgets than their Illinois counterparts due in part to state direction and assistance. Downsides to state involvement were also observed, with the Minnesota cases often unable to customize state-directed policy to their local requirements.