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ABSTRACT
Local governments make important public service decisions based on a critical assumption from urban political economy scholarship that development activities lead to economic growth, while redistributive activities do not. Using the Community Development Block Grant (CDBG) program, we test this local expenditure assumption by exploring the differential effectiveness of CDBG activities on individual and neighboring residential and commercial property values. To this end, we challenge the notion that development policies frequently improve economic returns while redistributive policies do not. We analyze the economic impact of 16 different CDBG activities on more than seven million properties between 2004 and 2017 in Dallas County, Texas. We find strong evidence that, contrary to conventional wisdom, redistributive policies can yield positive economic returns while development expenditures have mixed results. These findings have important implications for local governments seeking to grow their economy equitably.
Acknowledgments
We wish to thank Dr. Brian Ellison and Bruce Godfrey for their work on the data preparation and insight into CDBG activities. We also want to thank Brian Stromberg for his work and continual feedback on the project.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1. While these assumptions occasionally include allocational expenditures, the connection to economic growth is less clear given the non-concentrated benefits of these activities. We therefore exclude this category of activity from our analyses.
2. Within Dallas County, the cities of Carrollton, Dallas, Desoto, Garland, Irving, Grand Prairie, Lewisville, Mesquite, and Rowlett are CDBG entitlement communities in addition to the county itself.
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Notes on contributors
Michael Overton
Michael Overton is an Assistant Professor of public administration at the University of Idaho. His research on local governments explores competition among local governments, economic development, municipal fiscal health, and data science in the public sector and has been published in Public Administration Review, the American Review of Public Administration, State and Local Government Review, the International Journal of Public Administration, Municipal Finance Journal, Teaching Public Administration, Public Administration, and Global Public Policy and Governance.
Eric Stokan
Eric Stokan is an Assistant Professor in the Department of Political Science and affiliate faculty in the School of Public Policy at the University of Maryland Baltimore County (UMBC). He serves as Co-Director and faculty affiliate at the Metropolitan Governance and Management Transitions Lab (MGMT) at the Paul H. O’Neil School of Public and Environmental Affairs at Indiana University Bloomington and is a faculty affiliate to the Center for Urban Studies at Wayne State University. He currently serves as an editor for the Urban Affairs Review. His research focuses on explaining local government decision-making, particularly with respect to the factors impacting their ability to balance and achieve goals associated with economic development, community development, social equity, and environmental sustainability.