Abstract
The Enterprise Zones (EZ) and Enterprise Communities (EC) programs were bold multibillion policy experiments that attempted to solve many lingering questions about what was necessary to help struggling communities succeed. These programs were a significant breakthrough because they solved the gridlock in Washington over what was the best strategy for community revitalization. As Rich and Stoker explain, Republicans lauded the virtues of free markets and maintained that government was the problem; the most effective way to promote prosperity in distressed inner-city neighborhoods was to get government out of the way by removing regulatory barriers, reducing or eliminating taxes, and fostering entrepreneurism. Democrats, on the other hand, favored continued support of a variety of federal grant-in-aid programs that provided cities with resources for affordable housing, economic development, public safety, job training, education, and services for low-income children and families. EZ designees, for the first time, got both. (1)
This Clinton administration–era intervention was also an effort to capitalize on the emerging development paradigm of community building that crystalized in the 1980s; it was an approach that created a network of community-based organizations, foundations, private companies (real estate developers, banks, etc.), and government at federal, state, and local levels to revitalize communities through a quasi-market created by block grants and investment tax credits (Low-Income Housing Tax Credits in particular). This new approach was flexible and allowed for adaptation and learning.
The EZ initiative also put pressure on local governments to embrace the “reinventing government” movement that was popularized by David Osborne and fully embraced by the Clinton–Gore administration. EZ cites would have to set a vision—in full partnership with the affected communities—for how they would revitalize communities, and explain how that vision would require coordination and collaboration among a number of government silos. Those plans needed to have goals and performance benchmarks—a shift to outcomes rather than outputs in the language popular today.
Finally, the program promoted regionalism. This was not a program to simply improve a neighborhood; it also empha-sized the need to connect that neighborhood through transportation and other means to jobs and other opportunities in the metropolitan region.
The question at the time for inner cities (and currently for struggling rural and exurban areas and deindustrialized cities) was whether any policy, however enlightened, could stand against bigger trends that have been causing economic hardship. In the 1990s, most inner cities and many rural places experienced an increasing concentration of poverty and an exodus of middle-class talent and investment. Were the EZ and EC programs, or any strategy, up to the challenge of larger forces that were putting such stress on these places?
Most local economies suffered as many of the jobs that once had been available moved to suburbs and overseas or were eliminated due to technology and automation. Other, better funded federal policies also put pressure on struggling communities as programs that subsidized the Interstate Highway System and home ownership lured an increasing number of people to prosperous suburbs. At the same time, the residents who stayed behind struggled with a number of issues, including a low level of education and up-to-date job skills, that made employment a challenge.
The original EZ and EC programs targeted six sites: Atlanta, Baltimore, Chicago, Detroit, New York, and Philadelphia–Camden. These communities were similar in that they had been experiencing both an increase in the number of people living in poverty and an increase in poverty concentration. In addition to the $100 million grant, each site also had access to federal tax incentives, private facility bonds, and waivers of regulatory barriers. These tools were brought to bear on specific geographic areas that had poverty rates that were twice as high as the city as a whole (Wright et al., 1996).
The six communities applied the same programs to help improve their dire circumstances. Interestingly, the outcomes were different. The “primary puzzle,” according to Rich and Stoker, was: “Why were the outcomes achieved in the original EZs so different given that each city had the same set of federal policy tools and resources and the characteristics of their zone neighborhoods were broadly comparable?” (4). Rich and Stoker try to solve that puzzle by using multiple methods to analyze the outcomes of the different sites, including field research (in some cases, up to ten years’ worth), discussing prior analyses of EZ sites, and their own quantitative analysis. Surprisingly, Rich and Stoker found that larger forces (i.e., deindustrialization and globalization) hit hardest in the communities that had the best outcomes from the EZ interventions. They write, The two EZs that consistently produced positive results, Baltimore and Philadelphia, were among the most troubled cities in terms of market conditions and indicators of urban distress. On the other hand, Atlanta (the EZ with the weakest revitalization outcomes) was among the cities that were most advantaged in terms of social and conditions. (6)
They go on to argue that “our point is not that the social and economic context is irrelevant; our point is that poor local governance can squander a favorable context and good local governance can overcome a difficult context” (7). If local leadership both allows one to play well with a weak hand and can cause one to lose when one is holding good cards, what does one know about the nature of that leadership? Rich and Stoker try to unpack the “leadership variable” throughout the book and argue that it is a larger concept than just effective local government: “Good local governance transcends local government by creating institutions that encourage key local stakeholders (inside and outside government) to make durable commitments to a revitalization agenda, creating a legacy that can outlive changes in local government leadership” (5). The authors ground this observation in urban regime theory.
In the absence of good local governance, businesses, nonprofits, and government agencies make uncoordinated decisions. Consequently, the resources they control that could contribute to urban revitalization are not used effectively; their uncoordinated efforts may even work at cross-purposes. Good local governance allows a coordinated response to multiple, overlapping problems by orchestrating the efforts of numerous institutions and coordinating the resources the city can muster to address tough problems. (6)
The bottom line for Rich and Stoker is that “context is not fate” (233). They argue that local capacity contributed to good governance broadly conceived, and, most importantly, it invited meaningful community participation. Good outcomes were possible based on collaborations among political, business, civic, and nonprofit leaders across sectors. For example, in Baltimore, poverty declined in five of the six target areas between 1990 and 2000.
Collaborative Governance for Urban Revitalization: Lessons from Empowerment Zones is an important work for those who care about creating communities that promote opportunity for all residents. The good news, according to Rich and Stoker, is that this is possible to do, even in places that are struggling economically. The bad news is that the key ingredient—good leadership or governance—is an elusive one to understand, describe, analyze, replicate, or scale.
This book also is valuable in the current debate over cross-sector and place-based strategies to improve low-income communities. The jury is still out on these most recent efforts, including the Living Cities’ Integration Initiative, FSG Consulting’s Collective Impact Model, and the many efforts of the Obama administration to turn communities around, for example Promise Neighborhoods, Choice Neighborhoods, and Sustainable Communities. Leadership, however loosely defined, is also given as a primary variable in the varying success of most of these efforts, too.
Investing in What Works for America’s Communities, edited by Andrews et al. (2012), wrestled with the elusive nature of leadership in community revitalization. The chapter “Routinizing the Extraordinary,” authored by Erickson, Galloway, and Cytron, examined examples of community revitalization efforts, for example the Harlem Children’s Zone, Strive Partnership, and Purpose Built Communities, among others. The authors found that successful cross-sectoral interventions had five common characteristics: (1) trust from the community, (2) cross-sector (health, education, housing, etc.), (3) place based, (4) data driven, and (5) leadership from a “community quarterback” (i.e., an organization that has as its main objective the overall managing and coordinating of the intervention). Obviously, the authors had preconditions: each successful intervention seemed to be spearheaded by a charismatic super-genius with a close friend who was a billionaire.
The ambitious experiments that President Clinton and the U.S. Congress embarked on 25 years ago provided the foundation funding that is often provided by the billionaire in our successful examples. In the EZ experiment, the authors learned that some communities could capitalize on that foundation money thanks to local leadership. Communities could succeed even when confronting economic headwinds. For those lessons, the EZ and EC policy experiments were important and useful. Rich and Stoker focus their considerable energy and research talents on the policy experiments so a wider audience can also learn these lessons.
The need for a breakthrough is urgent. Too many people are not engaged in a full life where they can contribute to their families, their communities, the national economy, and our national civic life. If our nation and economy are to continue to thrive, everyone must thrive. This book is a powerful reminder that we need more policy experiments and more scholarship.