A Practitioner's Classification of Economic Development Policy Instruments, with Some Inspiration from Political Economy

Subnational economic development in the United States is characterized by a multiplicity of policy instruments. Economic development professionals typically work with only a few of the many possible kinds of instruments. To engage more effectively in economic policymaking, practitioners should have an overview that arranges potential policy instruments in a logical order. Drawing upon a tradition of political economy, this article makes such a classification. The classification uses the principle that, to affect the economy, government exercises power through generic policies. When the policies are directed at individual businesses, the policies can be cross-classified against a typology of business functions. When not directed at individual businesses, the policies shape market structure, define and limit forms of enterprise, and engage government itself in enterprise. These distinctions yield a scheme that classifies a complete tabulation of policy instruments.