Local Nonprofit Economic Development Corporations and their Implications for Sustainable Development

Local governments have been turning to Local Development Corporations for years to help streamline their job recruitment and development efforts. A criticism of these efforts is that turning over economic development to a third-party organization decreases transparency and runs the risk of institutionalizing private development interests over the well-being of the overall community. In this study published in Public Performance & Management Review, myself and co-authors Alicia Schatteman and Eric Stokan use surveys of U.S. cities at multiple time periods to examine the comparative use of nonprofit economic development corporations and their performance on smart-growth and social equity policy activities. We look at the two most common types of local nonprofit organizations — nonprofit Local Development Corporations (LDCs) and Community-Based Development Organizations (CBDOs) — and how they impact local government use of performance information and accountability mechanisms. In turning to policy outcomes, the use of LDCs is negatively associated with land use policies intended to advance social inclusion.