Local Government''s Role in Community Development Executive Summary
Retaining locally produced capital and increasing recirculation of money in the local economy are two key economic
Development strategies. Local
Government officials can support the establishment of alternative institutions that act as centers for capital retention and plug leakages in the local economy. Whether as facilitator or
public entrepreneur, local government can encourage broad-based citizen participation to ensure economic development benefits the entire community.
Today national and state governments are stepping up the process of shifting financial responsibility to the local level. .
Local economic analysis helps communities channel
growth and development in ways that benefit their social, political and economic welfare.
.Community development loan funds (CDLFS) are not-for-profit, tax-exempt corporations that borrow money and lend it at moderate rates of interest to low-income, unemployed, and otherwise economically disenfranchised people. Making loans at several percentage points below standard market rates makes a broader range of community-based projects possible.
Development banks are typically not-for-profit corporations that accept federally insured deposits to service depressed areas or nontraditional borrowers. In addition to lending money, they provide technical assistance and management training. They act as a bridge between private-sector capital and expertise and public-sector development programs.
Americans give over $100 billion a year to foundations and philanthropic organizations. Many not-for-profit charitable
organizations pass social surplus on to community-based activities and organizations.
Poor communities exist because resources and income are largely absent. Community development corporations (CDCs), nonprofit parent organizations that can have for-profit subsidiaries, were intended to stimulate both economic and political development in poor urban neighborhoods. They provide such services as job training, neighborhood repair, and increased access to health care.
The goal is to have more economic activity take place under local, democratic control.
The term "public" has gained an image of big government, ineptitude, inefficiency, and interference with freedom. "Private" has more positive overtones of innovation, efficiency, and support for freedom. However, public and
private organizations can share such problems as a stifling bureaucracy, unresponsiveness, and even corruption.
A distinction must be made between economic growth and economic development. Growth implies more of the same. Development implies changing relationships between people and their environment, changing institutions, and even changing the criteria for what is considered good or bad in life.
The tax system funds routine expenditures of the public sector, but how does a community build new foundations for development? Some have managed to shift assets into the social and public domain in an era when privatization has been considered efficient and wise.
Innovative public-private partnerships can enhance private development in tune with community values. Public funds are critical to building public assets and providing essential services. However, local taxes have risen, in real terms, faster than growth in income . Increasing tax pressure at the local level makes retention of value added even more crucial.
Decisions that affect people''s lives take place at all levels of government, but at the local level most citizens have the greatest opportunity for economic involvement. There they have the greatest access to elected and appointed officials, to public records and information, and to other citizens concerned with the process and its outcomes.
Potential positive outcomes of increased citizen participation include encouraging diverse and innovative approaches to solving problems and creating new opportunities. As a broader range of citizens become engaged in local issues, political discourse may widen to include the concerns an aspirations of all segments of the community.
Conclusion :Local government can encourage greater citizen participation in local economic development. Understanding the flow of funds into and out of the local economy can help communities identify strategies to plug leakages and increase local control. The necessary expenditure of time and resources to accomplish these goals holds the promise of a more stable, enriched local economy.
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