Looking globally, you find that most countries that have shown success in reducing poverty and increasing access to public goods have based that progress on strong economic growth. University curricula might have you thinking otherwise, but when thinking about growth, economics and politics cannot be separated.
It questions; Do these benefits flow to elite groups or certain segments of society, or are they more widely distributed? Do the beneficiaries change with the political tide, or do they stay consistent?
Malaysia and Thailand present two examples from our research. These were two of the fastest growing countries from the s to the s, until the East Asia financial crisis caused that to pause. Thinking from a purely economic perspective, it could have been expected that strong growth would have returned after the shock.
Economics alone cannot provide all the answers. Deals are what people actually agree on — the rules of the game — rather than the formal institutions, which may be ignored or corrupted. That deals can be relied on is crucial for investors to feel confident in making investments, without which economic progress will be slower and fragmented.
A crucial question to consider is whether everyone makes a deal around an investment opportunity or a government contract, or is it only those who are connected to the government?
Different types of development require different sorts of deals. You can get rapid growth without strong institutions so long as deals are ordered and trusted. As important as ordered deals are open, inclusive deals. These are deals that are accessible to a wide group, so lots of investors and enterprises can participate in development. In this way, deals must evolve from closed to open, with a wider group of investors able to participate, as opposed to just the friends and cronies of politicians.
The LSCP, through task force and board recommendations, takes positions on legislative issues that affect and impact our local business community.
I hope that I have helped answer some of these questions over the years in this column, especially in the last few weeks. I hope you will join us! And they get that economic inclusion includes connecting distressed neighborhoods and neighborhood-based entrepreneurs to the broader economy. This kind of economic development is harder work. It involves high-level business and public engagement, co-designing efforts with partners across sectors, and tracking performance that is often invisible and difficult to measure.
It requires engaging community leaders at the table of civic agenda setting and finding common language to build a shared future. Economic development remains a patchwork of innovation and legacy practices. We need to encourage more of the former in more regions if we are to make a dent on economic growth, prosperity, and inclusion.
On the contrary, this kind of economic development matters more than ever. Related Books. Businesses are always faced with decisions of where and how to invest their limited funds to be more successful. These funds are often borrowed from banks and investors who expect a return on their investment. Economic developers understand how these private investment decisions are made and work to make sure the decision is good for both the business and the community. There are many factors that come into play when private investment decisions are made.
Economic developers use tools such as incentives to reduce business costs which results in more investment in the community and creates benefits for both the private and public sectors.
The public sector makes the decision to approve the type and use of incentives. These decisions are based upon the desire to benefit the public. Economic development incentives are a valuable tool that can provide the state and local communities with a positive return on their investment.
Economic developers are experts in the use of incentives and forging agreements between businesses and government to ensure the results are mutually beneficial to all. The staff of the Michigan Economic Developers Association MEDA is happy to help connect you with an economic developer to help with your economic growth project. This delightful video explaining economic development is shared with permission from the Marketing and Branding team at Economic Development Winnipeg.
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