A Guide to Successful Place-Based Economic Policies

The field of urban economic development is in the midst of a big and much-needed rethink. After decades of focusing on companies—either handing out incentives or building clusters of startups—economic development is finally dealing with people. There are two key reasons for this: First, the deepening backlash to handing over billions in incentives, of which Amazon’s HQ2 may have been the tipping point. The second is the growing divide between the haves and have-nots, both within and across places.

The new focus is on place-based policies and inclusive development. In the past, economists and economic policy emphasized so-called people-based policies. Invest in people, encourage their mobility, and good things will come. But the rise in spatial inequality—the growing inequality across regions and the political backlash it has engendered in the form of populism—has convinced many economists of the need to embrace place-based policies to bolster the economic conditions of declining places.