Efficiency and Effectiveness of Fragmented Econ. Dev. Programs Are Unclear

I’m a big fan of the U.S. Government Accountability Office (GAO) – Canada has a version of this but not as wide ranging – the agency used to monitor government spending and to test the veracity of program spending and tax promises.

In this short review of the potential for duplication and fragmentation in federal economic development programs, I heard echos of what I have been talking about in New Brunswick. The GAO concludes:

…we have found that

(1) the design of each of these economic development programs appears to overlap with that of at least one other program in terms of the economic development activities that they are authorized to fund;

(2) Commerce, HUD, SBA, and USDA appear to have taken actions to implement some collaborative practices but have offered little evidence so far that they have taken steps to develop compatible policies or procedures with other federal agencies or to search for opportunities to leverage physical and administrative resources with their federal partners; and

(3) the agencies appear to collect only limited information on program outcomes–information that is necessary to determine whether this potential for overlap and fragmentation is resulting in ineffective or inefficient programs.

You might expect some duplication and a lack of collaboration across multibillion dollar agencies that service a country of over 300 million people but we see much of the same here in New Brunswick in a jurisdiction of 750,000 people.

The provincial government is in the middle of a large scale review of who, what, why and how economic development is done in the province (including looking at interactions with other levels of government).  This will hopefully lead to a more streamlined and effective approach.  In addition, this issue of program outcomes – and I am not talking about x interventions and y $$ spent but what did we actually accomplish – is critical and there is work being done on that as well.

My wish list includes:

-Far fewer separate government funding programs – in an ideal world there would be one ‘bank’ providing financing where there are gaps in the private market and to respond to competitive realities in the market.  I don’t see why there needs to be more than a dozen different departments and agencies that are giving out money to industry – in a tiny province smaller than most mid-sized urban areas across North America.

-Far more involvement of the the private sector in development efforts – and not specifically on a vested interest basis.  We want more expertise at the table not just open hands (I admit the lines on this are sometimes hard to find).

-An encompassing focus on finding and exploiting specific economic development opportunities.  The competitive environment for attracting investment has never been more complicated in the 20 years I have been involved.  We need to have clear value to sell – both internally and to the wide world – regional warehousing, energy projects, mining opportunities, biosciences testing lab, the Belledune free trade/tax free zone – whatever. but just saying “golly gee, we have hard workers down here” is not good enough.

-Much more accountability and measurement – based on fair and transparent metrics.

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