This chapter seeks to provide useful advice for local government policy towards economic development programs. The chapter: reviews the size and scope of local economic development programs in the United States; critically analyzes the various rationales offered for these programs; makes...

This paper argues that more rigorous evaluations of local economic development policies are feasible. Programs that aid selected small firms can be rigorously evaluated using an experimental approach, without excluding firms from assistance, by randomly assigning some firms to receive more...