The US Place-Based Policy Supply Chain

Place-based policy in the United States comprises a wide range of government programs that are spread across federal, state, and local agencies and that rely on public, private, and nonprofit intermediary organizations for policy design and implementation. We document how loosely connected vertical policy supply chains distribute resources from federal and state governments to recipients at the local level. The apparatus is the product of 150 years of policy innovation, both from the top down, with the federal government periodically undertaking major initiatives whose place-based impacts tend to be long-lived (even if the specific policies are not), and from the bottom up, with state and local actors engineering their own policy solutions, many of which have endured and now constitute modern policy practice. That practice includes not just tax incentives for business investment, the subject of most economic research on place-based policy, but support for community redevelopment, workforce development, small business promotion, technological innovation, and regional planning and strategy. The intermediary organizations that connect funding sources to recipients loom large in our discussion. Although their presence is often necessary for a region to obtain government support, their operations tend to be funded from non-state sources, which creates potentially wide variation in administrative capacity for place-based policy. We close by discussing what economists still have to learn about how place-based policy works.