Tracy M. Gordon
The United States is considered a highly decentralized country. More recently, American federalism has been in a state of flux. At the same time, decentralization has been on the rise internationally. Taken together, experiences in the United States and internationally point to some inherent tensions in federalism. This article argues that such concerns have prevented the adoption of an enduring state fiscal equalization program in the United States. Nevertheless, recent federal stimulus legislation may point to some ways forward. The article reviews the theory of fiscal federalism and its implications for intergovernmental grant programs. It also examines the evolution of intergovernmental transfers in the U.S. federalist system. Following this, the article evaluates design issues for any state fiscal equalization program. Finally, it suggests that there may be a role for ensuring states and localities against financial disaster and suggests future directions.
M. Freire, S. Lall, and D. Leipziger
This chapter examines Africa’s urbanization and the challenges and opportunities it presents, with emphasis on what it will take to make African cities efficient, sustainable, and inclusive. Using economic geography as an organizing framework, it proposes policies that not only support agglomeration benefits but also manage congestion costs. The discussion begins by sketching key elements of African urbanization (heterogeneity, income levels, capital investment, etc.) followed by a review of recent literature on urban growth models and how they apply to Africa’s urbanization process. It then considers what should be done to encourage efficient and inclusive African cities, while taking into account the diversity of countries as well as the continent’s geographical and social division.
Edwin S. Mills
This chapter examines the functions of and prospects for large metropolitan areas (MAs) in the United States. It argues that the high cost of transporting people and goods is a necessary, but not sufficient condition for MAs. Economies of scale and scope and the technical ability to substitute structures for land provide cost advantages to firms located in MAs. The factors that limit the sizes of the largest MAs include the size and geography of the country, the limited demand for commodities and services produced in the MA, congestion and pollution, and social issues such as crime, homelessness, poverty, illegitimacy, racial tensions, and other forms of alienation that increase with MA size. Because of these limiting factors, the largest US MAs are expected to grow at slower rates than the US population in coming decades, whereas suburbs will continue to experience rapid growth.
Assessing State-Level Science and Technology Policies: North Carolina’s Experience with SBIR State Matching Grants
John Hardin, Lukas Brun, and Lauren Lanahan
State government R&D expenditures play a critical role in supporting innovation in the United States. This chapter discusses the growing role of US state governments in supporting R&D activity, paying particular attention to a small business innovation program in North Carolina designed to complement the federal Small Business Innovation Research (SBIR) program. The chapter first provides an overview of the literature on state science and technology policies that encourage innovation, competitiveness, and economic development at the state level. It then reviews complementary federal and state government policies aiming to improve the success rate of the SBIR program, with particular attention to the One North Carolina Small Business Program. It discusses the objectives of the state policy and provides results of a program assessment, which indicate that the state matching program meets the objectives of the policy and provides positive spillover effects to North Carolina’s economy.
David Lawther Johnson
For regions seeking to advance economic competitiveness, building appropriate clusters of concentrated economic activity remains an effective strategy, even as traditional “smokestack-chasing” approaches to economic development grow increasingly problematic. Still, cluster approaches face their own challenges in addressing the costs and risks of innovation, producing significant numbers of new jobs in the short term, carrying out credible claim marketing efforts in a data-driven global marketplace, and demonstrating sufficient breadth of benefit from their necessarily focused concentrations of investment and talent. For the past 15 years, Central Indiana has pursued a series of cluster initiatives through an unusual organizational strategy and structure that provides an instructive view of the opportunities and challenges in 21st-century cluster development.
Martin Binks and Simon Mosey
In the UK, business schools are being exhorted by government to engage with local organizations to enhance their competitiveness. However, a historical legacy of providing courses for international students and a research focus upon multinational firms has constrained the capability of most business schools to contribute in this way. This chapter highlights global examples of business schools recognizing the opportunity to develop locally useful knowledge and enhance the capabilities of their students to deploy that knowledge. Business schools are seen to significantly reposition their offer by developing the leadership skills of local organizations and enhancing the entrepreneurial and problem-solving skills of their students for local deployment. The chapter concludes that a sustained emphasis upon faculty and student engagement with local organizations can allow business schools to overcome legacy constraints and thereby contribute more fully to local economic competitiveness for mutual benefit.
The literature on the university’s role in regional economic development and technology commercialization has almost entirely focused on commercialization as managed through technology-licensing offices. Drawing upon case studies from a forthcoming book, it is shown that technology transfer through regional engagement by University of California campuses is far more complex and bidirectional than the current academic literature indicates. We also show that there are distinct disciplinary differences in the technology transfer process. For this reason, we suggest that technology transfer offices have little to do with most of the knowledge transferred by universities and, in certain cases, may even frustrate the transfer process. The chapter suggests better understanding of the true nature of technology transfer would allow both policymakers and university administrators to develop more effective policies.
Albert N. Link
The flow of knowledge from a university research park is not a new theme in the academic domain. Scholars have emphasized the flow of knowledge from university research parks, but those that have focused on the prevalence of this phenomenon in the United States have been somewhat limited in the availability of data related both to the genesis of the park and to the performance of the park. This chapter focuses on two performance measures: patents received and scholarly publications emanating from the research conducted by in-park firms. It finds that on-park firms have received more patents than comparable off-park firms, and the scientists in the on-park firms have published more scholarly articles than scientists in comparable off-park firms, all else remaining constant.
There is an extensive literature linking clusters to innovation, through the mechanism of knowledge spillovers. This chapter argues that, in order for such innovation dynamics and knowledge spillovers to evolve, there must be a “cluster commons,” where individuals, firms, and organizations can exchange information, interact, and initiate collaboration. A well functioning commons is not an automatic or natural phenomenon. Instead, clusters are typically characterized by considerable gaps between firms and between firms and related organizations, both within the cluster and to outside markets and clusters. Bridging the seven cluster gaps through a commons involves construction by both invisible and visible hands. The chapter sets out to develop the concept of the cluster commons and shows how it can be constructed and kept, in order to avoid the tragedy of the commons.
Sprawl refers to the aggregate land area in urban use. Planners view sprawl from a descriptive perspective, whereas economists view it from a normative one. This article opens with a brief review of how unpriced traffic congestion causes excessive travel, as well as excessive urban sprawl, and how Pigouvian taxation could restore efficiency by eliminating the excessive travel. It also examines how this conclusion has been reversed in recent theoretical models. New results, based on polycentric theory, have helped discover the efficiency of urban sprawl. It argues that excess urban sprawl can often be negative. Further, it turns to key empirical facts about urban areas and presents a statistical analysis of the city size's effect on average commutes. Finally, it emphasizes the fact that new urbanism perceived as antisprawl tools, may be wrongly promoted. But these tools of modern planning have an important role to play in serving niche markets.