This chapter seeks to provide useful advice for local government policy towards economic development programs. The chapter: reviews the size and scope of local economic development programs in the United States; critically analyzes the various rationales offered for these programs; makes recommendations for what local policy should do about business attraction and incentives, business retention, new business development, high technology development, brownfield development, distressed neighborhoods, and downtowns; and discusses how local economic development programs should be organized, managed, and evaluated.
NOTE: A revised version of this paper was published as "Economic Development" in J.Richard Aronson and Eli Schwartz, eds., Management Policies in Local Government Finance (5th ed.). Washington, DC: International City/County Management Association, 2004, pp. 355-390.