Client Group Influence in Economic Development Organizations: Evidence From North Carolina, Nevada, and Oregon

Abstract

States have empowered economic development organizations (EDOs) to administer incentive programs. But EDOs are fundamentally oriented toward client service, which can lead to client group dominance. Client group dominance can undermine the legitimacy, accountability, and efficacy of incentives. Case studies of economic development administration in North Carolina, Nevada, and Oregon demonstrate that EDOs were more likely to solicit and prioritize client group input, and that they established practices that barred competing group input. The article provides theoretical and practical implications, including potential reforms to bring EDOs closer to established good governance principles.