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20 Pol'y Stud. J. 10 (1992)

handle is hein.journals/plyssjnl20 and id is 1 raw text is: Policy Studies Journal, Vol. 20, No. 1, 1992 (10-21) The New Approach to Economic Development: An Analysis of Innovativeness in the States David R. Berman and Lawrence L. Martin State governments have long actively attempted to develop their economics. In recent years, however, several scholars, institutions, and think tanks have encour- aged the states to take a new, multifaceted, and comprehensive approach to economic development. The extent to which states have done so varies widely. We focus on how this variation is related to the general tendency of the states toward innovativeness. In the process, we also explore theories and findings regarding how a broad range of environmental and political variables relate to adoption of the new approach to economic development. Research Focus and Design The range of activity by state governments on economic development in recent years has gone far beyond the traditional emphasis on infrastructure building (Dye, 1990; Eisinger, 1988; Fosler, 1988; Hansen, 1990; Osborne, 1988). In the new paradigm of what it takes to promote development, policymakers also give attention to financial incentives, education and training, aiding distressed areas, and a wide assortment of public-private partnerships.? One useful measure of theextent to which individual states are adopting the new multifaceted or comprehensive approach to economic development is an index prepared by the Corporation for Enterprise Development (CED, 1987). 'Ihe CED is a highly regarded business-oriented think tank whose reports on state activity and recommendations concerning the need for states to adopt the new approach to economic development policy are widely disseminated (Grady, 1989). The CED index consists of seven subindices which, in turn, summarize some 32 distinct indicators. Generally, the subindices provide measures of the extent to whichthestates: (a)show thecapacity toundertakeeconomicdevelopmentactivities- for example, collect and analyze relevant information, develop and review policies, andcoordinate efforts; (b) develop a system of taxation which uses a variety of'taxes, can support a consistent level of public services and investment, and is minimally regressive at worst; (c) formulate finance regulations in regard to statewide branch banking, insuring private investors against risk, and other matters which are necessary to mobilize capital; (d) establish favorable technology and business development programs through such meansas university research centers that link up with business, technology transfer programs, and small business development centers; (e) invest funds in building and maintaining the infrastnrutre; (f) invest funds in human resources,forexample-publiceducationatalllevelsandlabor trainingprograms;and