Wrestling with Markets in Economic and Community Development

This commentary critiques common definitions of economic development (EcD) that wrongly assign political and economic agency to communities while overlooking regional EcD asset markets and business outputs. The authors argue that communities are socially constructed and are not economic agents. As an alternative, they introduce a framework based on the five developments—economic, site, workforce, community, and housing—that, together with productivity gains, drive gross regional product. The model distinguishes between EcD outputs (goods and services) and politically desired outcomes (jobs, income, taxes), and explains how labor, site, and housing markets intersect to define economic regions. Economic developers are portrayed as market-making intermediaries who reduce information and transaction costs, while community developers support neighborhood development, including workforce and site development. Two structural obstacles to effective EcD practice are identified: mismatches between political and economic geographies and between long-term asset development and short-term business decisions. The commentary concludes that EcD can positively impact low-income neighborhoods when practitioners use market-aware intermediaries to connect assets with regional employment and product demand.