Place-based v. Person-based Economic Development Strategies: A Reconciliation

Urban development policies are usefully characterized as either “person-based,” where directed toward individuals, or “place-based,” where eligibility is conditioned on location. While extremely popular among local politicians, officials, and community advocates especially for particularly poor performing neighborhoods there are many well-known arguments against place-oriented programs. Development aid tied to geography is crudely targeted and often introduces strong spatial distortions. That said, location contains information helpful in identifying intended recipients, space constrains individual’s economic activities, and the effectiveness of people-based programs vary over space. Then there is the visibility of resources focused on a particular place, a key element of political support. Geography thus matters as parameter, as externality, as marker, and as political economy, even as it also introduces distortions: Location introduces both benefits and costs. Rather than strictly a matter of either/or, the policy question appears to be more one of negotiating the tradeoffs.