Shaping Support for America's Struggling Regions
Shortly after the 2016 U.S. election, I joined a deep discussion examining its surprising results. Around the table were experts on so-called Trump voters along with people engaged with many other communities that make up the United States. One thing they had in common was the feeling that their communities were struggling and had been neglected for some time. They believed decisions were being made in Washington and in state capitals that affected their lives, but without their input. It didn’t matter if it was a largely white community in rural America or a largely Latino community in one of our cities – they had the same beef.
Often what happens is that neglected regions of our country compete for the same scarce benefits. They woo the same businesses, the same myriad sources of government funding, and the same extra aid for their schools. Frequently, they lack the capacity and the knowledge to tap resources and expertise that can advance a region’s vision for itself. More often than not, they come up empty-handed.
Much has been said about income inequality in the U.S. and what it means for the ability of people to earn a living that will support their families and provide the economic security they need to succeed. The same can be said of the unequal parts of the US. Over half of our GDP is produced by 20 metropolitan regions. As AOL founder Steve Case points out, currently 75 percent of venture capital went to just three states: New York, California, and Massachusetts. Part of addressing inequalities in individual income may also be to address geographic inequalities as well.
The Struggling Regions Initiative identifies ways for struggling U.S. regions to collaborate for better means of economic growth
That is why the Niskanen Center’s new Struggling Regions Initiative, supported by The Rockefeller Foundation, holds such promise. As Niskanen’s Sam Hammond and I wrote recently, the initiative identifies ways for struggling U.S. regions to collaborate, rather than compete, in order for more parts of the country to gain access to better means of economic growth. As a result, the project will inject new ideas of more broadly shared economic growth into our policy discourse, but more importantly into places that need them most.
An example of the benefits of collaboration is the new Opportunity Zone program. The federal tax reform law adopted just over a year ago contains a provision providing tax incentives for private investments in low-income areas. The potential of this program is enormous. However, it is difficult for most struggling communities to obtain the resources to design projects and develop complex funding prospectuses to attract capital to help communities to grow. It is a highly specialized process. But if struggling regions collaborate, it might be possible to provide technical assistance to all of them to put together plans that are more likely to attract investment.
As we are all no doubt aware, the 2020 election season is upon us. People in those campaigns often are looking for the next Big Idea. I suggest that the Struggling Regions Initiative has that potential.