Does it matter ‘who governs?’ Governance networks,local economic development policies,and the Great Recession

This study purports to examine whether governance networks influence cities’ use of local economic development policies, specifically business incentives, and if the role of networks changed during the Great Recession. Using American cities that responded to the International City/County Management Association’s Economic Development Survey in 2004 and 2009, hierarchical cluster analysis was employed to identify groups of cities with similar network membership patterns. The results of negative binomial regression models indicate that before the recession, the total number of actors participating in the network played a larger role in the total number of incentives provided by cities as well as the use of tax incentives. This changed in 2009 when network type emerged as the important governance-based determinant of the same variables. The results also suggest that traditional theories of economic development do not hold during times of economic and fail to explain the use of planning and labour incentives.