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| Economic Development Corporations (United States) | |
|---|---|
| Name | Economic Development Corporations (United States) |
| Type | Nonprofit, Public-benefit corporation |
| Founded | 20th century (widespread post-1940s) |
| Jurisdiction | United States |
| Headquarters | Various |
Economic Development Corporations (United States) are quasi-public or nonprofit corporations established to promote local, regional, and state economic growth through business attraction, retention, and workforce initiatives. Originating in the mid-20th century amid industrial restructuring and urban renewal, these entities operate across municipal, county, and state levels, interacting with institutions such as the U.S. Department of Commerce, Small Business Administration, Economic Development Administration, and philanthropic organizations like the Kaufmann Foundation. They collaborate with private actors including Chamber of Commerce, JP Morgan Chase, Wells Fargo, and regional partners such as the Brookings Institution and Urban Institute.
Economic development corporations trace roots to post-World War II programs like Marshall Plan-era thinking and New Deal agencies such as the Public Works Administration and Works Progress Administration. Early models drew from precedent-setting organizations including the New York City Economic Development Corporation and the Port Authority of New York and New Jersey, which influenced state statutes like those in Delaware, California, Texas, and New York. Legal forms vary under state nonprofit law, municipal charters, and statutes regulating public-benefit corporations, enabling tools found in legislation such as the Tax Increment Financing frameworks in Illinois and California Redevelopment Law. Federal legislation—examples include programs administered by the U.S. Department of Agriculture and the U.S. Economic Development Administration—shaped grant eligibility and reporting requirements.
EDCs adopt governance models resembling boards of directors used by entities like GE and Walmart board structures, with appointees from elected officials such as mayors and county executives like those in Los Angeles and Cook County, Illinois. Boards often include representatives from institutions like Harvard University, Columbia University, local Chamber of Commerce, and major employers such as Boeing, Ford Motor Company, or Google. Chief executive officers or presidents mirror leadership in organizations such as National Association of Counties and International Economic Development Council, and staff functions align with departments seen in U.S. Securities and Exchange Commission filings for nonprofit corporations. Governance must navigate conflicts among stakeholders including labor unions like the AFL–CIO, development firms such as CBRE, and elected bodies such as state legislatures in Ohio or Florida.
EDCs provide services comparable to programs in Small Business Administration and initiatives modeled by Economic Development Administration grants: site selection assistance like that performed by SelectUSA, incentive negotiation similar to activities of State of Texas Economic Development offices, workforce training partnerships with institutions such as Community College System of Maryland or City College of New York, and export promotion in concert with U.S. Commercial Service. They manage real estate portfolios akin to Empire State Development Corporation projects, administer tax-exempt bonding like Industrial Development Bonds used in Missouri, and deliver entrepreneurship programs resembling efforts by SCORE and Kauffman Foundation.
EDC capital comes from a mixture of municipal appropriations seen in Boston and Seattle budgets, state grants like those from New York State Urban Development Corporation, federal grants via Community Development Block Grant and Economic Development Administration, philanthropic gifts from entities like the Ford Foundation, and private investment from firms such as BlackRock and Goldman Sachs. Financial instruments include tax increment financing used in Chicago, revenue bonds comparable to Industrial Development Bonds, loan funds similar to CDFI Fund-backed vehicles, and public-private partnership structures seen in projects by Skanska and Bechtel Corporation.
Notable programmatic models include business incubators and accelerators similar to Techstars and Y Combinator, brownfield redevelopment projects mirroring efforts in Port of Portland, workforce pipelines like ApprenticeshipUSA, and cluster initiatives inspired by Milken Institute research. State-level initiatives include examples from Texas Economic Development and California Governor's Office of Business and Economic Development, while regional consortia reflect models such as the Greater Houston Partnership and Metro Atlanta Chamber of Commerce.
Evaluation frameworks borrow from analytic methods used by Brookings Institution, RAND Corporation, and Urban Institute, measuring metrics such as job creation reported by agencies like the Bureau of Labor Statistics, private investment leveraged similar to National Bureau of Economic Research case studies, and tax base changes analyzed in works from Harvard Kennedy School. Impact assessments confront attribution challenges common to studies by National Academies of Sciences and Government Accountability Office, requiring counterfactual analysis and longitudinal data comparable to those used by Census Bureau and Bureau of Economic Analysis.
EDCs have faced criticism documented in reporting by outlets such as the New York Times, Wall Street Journal, and scrutiny from watchdogs like Good Jobs First and legal challenges in jurisdictions including New Jersey and California. Controversies include subsidy races criticized in analyses by Institute on Taxation and Economic Policy, allegations of cronyism involving firms such as Bechtel or AECOM, displacement issues cited in cases like Detroit redevelopment, and debates over transparency paralleling disputes about Tax Increment Financing in San Francisco and Baltimore. Critics often call for reforms advocated by scholars at Columbia University and University of California, Berkeley.
Category:Economic development in the United States