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City Economic Development

CityEconomist has expertise in the following areas:
- the connections between specialization of production and knowledge and economic growth,
- comparative state and local government performance analysis,
- links between tax systems and incentives and economic growth.

City Density and City Destiny

The six summaries below review the arguments for the importance of city knowledge density and for the type of government action that is needed to encourage growth in a local knowledge base.

How Can Governments Help Cities Grow?

States and localities seeking to make their cities prosperous typically hire a deputy for economic development to make deals with companies to lure them in town. They may use eminent domain to clear space. Unfortunately, benefits may be overestimated or costs underestimated... or both. 
Idea Cities Grow  
Serving as ports, railway terminals and manufacturing centers is of decreasing importance for cities. Tomorrow's cities may most reliably thrive if they serve as centers and marketplaces for ideas. Cities with more skilled people will grow, and their residents will earn more. 
Why Idea Cities Grow 
Why do idea cities 
prosper? Knowledge entrepreneurship was promoted in the 1930s by Karl Compton at MIT and Frederick Terman at Stanford. They saw the economic benefits of academic research and with government help transformed relationships between their universities and local businesses.
Dense Cities Prosper
More populous (denser) cities tend to have (1) higher average wages and (2) a higher proportion of skilled (educated) residents. What is cause and what is effect? 
What Cities Can Do
Five ways cities seek to improve their economies: Improve the physical infrastructure (medium difficulty). Improve efficiency of city services (hard). Give businesses tax breaks (easy). Encourage creative people to move in (easy). Encourage knowledge entrepreneurship (medium difficulty). 
Creating Tech Jobs - Slide Show
Boston and the Bay Area surpassed NYC in creating tech jobs because they became "dense" in tech areas. They intensified their tech knowledge through close business-academic-government communication, using the Compton-Terman model. NYC cannot be complacent and should be using the same model, the "Triple Helix" approach. More (slide show)>>.

Health Services as an Economy-Building Knowledge Industry

In a seminar presented in London, UK on "Density and Destiny" to the London Deanery, National Health Service and University of London, February 7, 2006, attended by senior NHS officials and University of London professors, CityEconomist noted the role of cities as knowledge centers and the importance of city density for skills specialization, innovation and advanced education and training. More (slide show).

Economic and Policy-Related Reports for the City of NY, 1992-2006

Report on impact of 9/11 WTC attack, issued in October 2001, won a National Conference of State Legislatures Citation for its “speed and depth of analysis.” Was a major document relied on for several months by NY State and City officials while negotiating for $20 billion in Federal aid. Revisiting the data a year later, on September 4, 2002, the study generated more than 100,000 visits to the Comptroller's web site in 10 days.

Reports on NYC teenage unemployment in 1993 and 1998 were both front-page NY Times news and led to the creation by the City and local businesses of more summer jobs for NYC youths.

Ireland Peace Bond proposal (1994), adopted by the Comptroller, contributed to incentives for peace talks and cease fire in Northern Ireland.

Expert testimony in Con Edison cases presented the consumer and small-business case against rate increases (1996) and proposed merger case (2000). The testimony helped reduce the impact on the affected ratepayers of higher rates and helped avert an unfavorable merger.

Study of the NYC sports economy (1996) made clear for the first time the far greater economic importance to NYC of the sports associations (NBA, MLB, NFL, NHL) than the teams (Yankees, Mets) and was widely used in subsequent debates over the appropriateness of taxpayer support for a proposed Yankee or Jets Stadium on the Upper West Side.

Study of the NYC Software/IT Industry (1999) showed the special character and opportunities of the software industry in the City. Presented the case for special units to assist the industry in developing broadband capacity in the City and at Verizon. The Verizon office was subsequently created.

Report on the mix of NYC taxes was published initially as an issue of Economic Notes and then as "Local Government Tax Policy: Measuring the Efficiency and Equity of New York City's Tax Mix, 1984-1998" in Public Budgeting & Finance, June 2000 (co-authored with Janine Berg and Farid Heydarpour). Won the Jessie Burkhead Award (2000) for the best article by a practitioner and was used in the 2005 Charter Revision debate over the need in NYC for a Rainy Day Fund.

Net Loss: Secondary Effects of City Budget-Cut Proposals John Tepper Marlin, Senior Policy Adviser, headed the project team. This report showed how short-term budget cuts could require greater longer-term expenses. For example, assistance to disabled or elderly people to allow them to stay in existing facilities can prevent more costly government intervention or services.

Estimated economic impact of WTC 1993 attack, the only official government estimate for three months.

Initiated estimate of gross city product measure in 1992
. This GCP estimate has been used for determining the onset and ending of NYC's recessions by the Comptroller's Office. It has also been used frequently in the form of a daily rate, initially by the Comptroller's Office and subsequently by mayoral agencies, to provide a framework for estimates of the economic impact of events on NYC.
 

Recent reports downloadable from www.comptroller.nyc.gov

Reports for the Federal Government

National Commission on Productivity and Quality of Work Life: New York State Survey
Commissioned the Council on Municipal Performance (John Tepper Marlin, President) to prepare a study of performance indicators for a sample of local governments throughout New York State. Developed a questionnaire for use by counties throughout the state. Documented the uneven state of performance measures, while providing some comparisons among communities that did develop indicators. Conducted four workshops throughout the state to review the measures. Consulting Associate: Professor Lewis Friedman.

Department of Housing and Urban Development
1. Via a competitive process, commissioned the Council on Municipal Performance to prepare a guide for localities on contracting municipal services, edited by John Tepper Marlin and published by Wiley. This book was used as the basis for a series of seminars on public-private comparisons in different parts of the United States.
2. Through a competitive process, commissioned a guide for local governments on auditing, which was prepared by consulting associate Peter F. Rousmaniere. The first edition sold out and a second edition was printed.

United States Information Agency
Commissioned John Tepper Marlin to give several talks and work with local business and government leaders in Kharkov, Ukraine, to consider projects to convert military facilities to civilian use. Recommended using tank factories to build freight trucks and military airfields to create a distribution center like that of Federal Express in Memphis that might attract high-value manufacturers and consolidators.

Federal Deposit Insurance Corporation
- Study of deposit insurance in different parts of the world, published in The Banker's Magazine.
-
Study of the quality of bank credit in different states, published in The Journal of Money, Credit and Banking.

Consulting Associates
Technology-Based Economic Development, DAVID HOCHMAN
Community Development: JOHN WEISER, Brody Weiser Burns
Pandemic Simulation: CLARK ABT

New content © 2006, 2007 by CityEconomist.

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