USING PRIVATIZATION THEORY TO ANALYZE ECONOMIC DEVELOPMENT PROJECTS Promise and Performance

The heightened interest in economic development as a policy option for local governments has brought into focus the need to better understand the design and administration of economic development partnerships. The economic development literature focuses on issues of economic benefit and competition, giving little attention to the public-private partnerships at the heart of nearly all economic development projects. This paper examines economic development through the lens of principal-agent theory as found in the literature on public-private partnerships and privatization to determine the suitability of these literatures for application to economic development. This theoretical framework is applied to an exemplar case of economic development to illustrate the relative utility of these different approaches. The article concludes with some thoughts and observations about the efficacy of a cross-pollination of theory.