Planet Money story on economic development agencies failed

Edward Schumacher-Matos, the new ombudsman at NPR, writes about a recent “Planet Money” story on economic development agencies that didn’t have the facts to support its conclusions.

Schumacher-Matos writes, “A central example is seen when Davidson said: ‘This is what drove me crazy about this conference, actually about the whole profession of economic development. They are not creating jobs. They are just moving jobs around.’

“This is an underlying theme to the whole piece and leads Davidson to observe about communities across the country: ‘Now we have this race to bottom: Who can cut back government services the most? Who can eliminate the most regulation?’

“These are breathtaking conclusions. But they were unsupported by the story. My experience is that most economists would say that Davidson’s sweeping statements are critically insightful, but only partly true. And indeed, in other contexts, the story alluded to the work of economic developers in attracting foreign companies, in attracting expansion of domestic companies and in nurturing start-ups — all of which sprout jobs. To the extent that companies improve their productivity by moving from one locale to another, jobs also can be created.

“Whether a ‘race to the bottom’ is really underway, meanwhile, was only glossed over. Something like that seems to be happening, but unmentioned was whether the process also forces an opposite, positive reaction. The competition may be forcing communities to improve schools, technical training, parks, transportation, land use and the like in order to foment business, to wide benefit.”

Read more here.