Economic Development and Opposing Theories Research Proposal

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¶ … Economic Development and Opposing Theories

In the United States, current economic crises have left many states, governments, and individuals worried about unemployment, retirement, and bankruptcy. While this is a federal program, it translates to the states. In many ways and for many reasons, states try to develop their economies. This is most obviously seen during years when the governor is up for election. With policies to decrease unemployment, encourage college attendance, and encourage firm development, governors and their state advisors attempt to increase economic development. For decades, politicians have been theorizing about state economic development, how it takes place, why it takes place, and how it can be classified, among other research questions. This study will examine four relevant studies in the field of state economic development, summarizing them, and then comparing and contrasting their theories regarding state economic development.


While the subject of economic development is old, not all scholars agree that the theories in connection with the subject have been distinguished appropriately. In fact, this is the premise of James J. Wilson's (1999) article, "An institutionalist take on state activism in economic development: a theoretical framework." Wilson (1999) argues that all work prior to his article classified the topic of state activism in economic development too simply. Primarily, Wilson (1999) bases his argument on the claim that ad hoc classification systems, taxonomies, and conceptual frameworks are the only three categories that scholars have used to order types of state activism in economic development. He deals with these classifications from most general to most specific. For instance, ad hoc classification systems are sets of "arbitrary categories" designed to classify observations in state activism in economic development. Thus, this classification does not allow much room for research or study. Moving slightly more toward the use of research and study are the taxonomies. More specific than ad hoc classification systems, this category of classification is closely associated with the world of scholarship, offering complex definitions, but not explanations for observations in state activism in economic development. Finally, the most specific category in Wilson's (1999) categorization is the conceptual framework, as it offers "explanations and predictions for empirical observations" (Wilson 1999). However, because they do not offer these predictions and explanations in conjunction with taxonomies and because they do not allow for deductive reasoning, Wilson (1999) argues that conceptual frameworks are still inferior. Thus, Wilson (1999) argues that theoretical conceptualization models that do the complex subject justice. Instead of the above propositions, Wilson (1999) creates a theoretical framework based on growth theory, economic policy, and international constructs that he suggests is the best framework for viewing the subject thus far.

Following Wilson's (1999) suggestion, several theorists have put into practice specific models for describing state economic development. For instance, Paul Trogen's essay, "Which Economic Development Policies Work: Determinants of State Per Capita Income," argues that economic development policies only work if they offer incentives for firms. In other words, Trogen argues that these policies only "add to state economic effectiveness and welfare if they compensate manufacturing firms for the positive externalities they produce." Trogen goes on to explain that the controversy surrounding state involvement in economic aid is great. In fact, many proponents of competitive policies that offer incentives to companies for locating in their state suggest that these programs actually increase development, while their opponents argue that the state programs simply cancel each other out. Trogen weighs in by suggesting that no one can know the truth because no theoretical model currently exists to show the policies in comparison. In his model, Trogen argues that states can only succeed in economic development when they provide incentives up to the amount of positive results they will get from the companies in terms of economic development. Paying companies more than they pay the states, which is what the alternative really is, does not yield positive results.

Like Trogen's model, Robert Costello of the American Trucking Association and Allen Brierly, a professor of Political Science, suggest another model that states may choose to implement when trying to grow their economies in his essay, "Accounting for State Economic Performance: A Time-Series Cross-Sectional Analysis of the Limits of State Economic Policy." As Wilson (1999) suggests, Brierly and Costello's model is a specific recommendation for certain actions in growing a state economy. Like Trogen's model, Brierly and Cotello's argues that certain variables work when trying to encourage state economic growth, while others… [END OF PREVIEW]

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Cite This Research Proposal:

APA Format

Economic Development and Opposing Theories.  (2008, October 30).  Retrieved December 14, 2019, from

MLA Format

"Economic Development and Opposing Theories."  30 October 2008.  Web.  14 December 2019. <>.

Chicago Format

"Economic Development and Opposing Theories."  October 30, 2008.  Accessed December 14, 2019.