Good article in the Urbanophile.
One of the things that bugs me about local economic development is that elected and appointed officials don’t seem to understand it much. Certain types of government funding add value and spur subsequent independent private investment and other types of funding do not. Ideally, each dollar you spend generates significantly more in private investment.
As Rolf Goetze makes the point in Building Neighborhood Confidence (1976), although referring to neighborhood stabilization, that government programs shouldn’t be fostering dependence but rather spurring people to continue to invest in their neighborhood–”building confidence in remaining in and investing in their neighborhood.”