Role of Local Infrastructure Policies and Economic Development Incentives in Metropolitan Interjurisdictional Cooperation

Abstract

This paper analyzes infrastructure development policies and economic development incentives used by the Indianapolis region's largest cities and the counties surrounding Marion County. These two policies create the interjurisdictional environment for cooperation or competition for urban development, which structures the approaches cities take in pursuing development. This analysis assesses how the urban development policy environment supports either cooperation or competition among cities and the counties around Indianapolis. Among cities, the policies could be very different or quite similar. When different, there is interurban competition because differing development environments exist. Where policies are similar, interlocal cooperation may result. The analysis shows the region's infrastructure policies to be open-ended and designed to allow the governments to compete for development. Economic development incentives used by Indianapolis jurisdictions suggest the underlying development environment is competition, not cooperation. This can be positive because city administrators have flexibility to negotiate development deals. But flexibility creates competition among the region's governments. When development interests know cities have flexible policies, interjurisdictional competition emerges in order to advertise a willingness to negotiate or market development policies highly favorable to business activity.