Federal Resources for State and Local Economic Development
Congressional research reportDec 22, 2021
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Federal Resources for State and Local
Economic Development
Updated December 22, 2021
Congressional Research Service
https://crsreports.congress.gov
R46683
SUMMARY
Federal Resources for State and Local
Economic Development
Congress has authorized over 130 economic development programs administered by over 20
departments and agencies. These programs support efforts to improve job opportunities, tax
bases, individual or community wealth, and quality of life measures; contribute to economic
growth; create reinforcing industrial clusters; and reduce economic inequality. In contrast to
centrally-planned approaches, most federal programs in the United States are designed to
strengthen the national economy by supporting the plans and strategies established by state and
local stakeholders.
R46683
December 22, 2021
Julie M. Lawhorn
Analyst in Economic
Development Policy
The range of economic development programs approved by Congress reflects shifting priorities, changing global market
trends, and a variety of theories about what drives local and regional economies. Before World War II, federal investment in
economic development programs focused on expanding infrastructure, access to public services, and industrial development.
Over time Congress has authorized additional, flexible programs that support a wider array of strategies—including strategies
designed to respond to structural changes in the U.S. and regional economies. State and local stakeholders also have
responded to shifting priorities and markets by implementing entrepreneurial initiatives to improve competitiveness, foster
innovation, and reduce capital, market, and other barriers.
The federal departments, agencies, and programs primarily associated with economic development include the Departments
of Agriculture (USDA), Commerce, Housing and Urban Development (HUD), Labor, and the Treasury; the Small Business
Administration (SBA); and federal regional commissions and authorities. The Departments of Defense (for its Office of
Local Defense Community Cooperation programs), the Interior (for its Bureau of Indian Affairs and reclamation programs),
HHS (for its Office of Community Services programs), and Transportation (for its infrastructure programs), and the
Environmental Protection Agency (for its state revolving funds and brownfields program) are also sometimes included in
classifications of federal agencies involved in economic development.
Federal resources administered by these agencies are primarily delivered to state and local stakeholders through technical
assistance and financial assistance programs (e.g., grants, credit assistance, and tax policy). These programs vary by purpose,
eligibility criteria, and the types of activities supported. Some forms of federal assistance are targeted to specific scenarios or
disruptions (e.g., assistance in response to economic dislocations or shocks, or assistance for ongoing conditions of economic
distress). Federal programs often have a geographic dimension that targets assistance to a specific area. Some programs direct
assistance to individuals, disadvantaged individuals in specific areas, or types of recipients, beneficiaries, or regions (e.g.,
low- and moderate-income neighborhoods, rural areas, workers, students, small businesses, regions with resource-based
industries). Many current federal programs support infrastructure, workforce development, and business assistance activities.
Others fund planning, technical assistance, economic adjustment assistance, disaster recovery, innovation, entrepreneurship,
the development of scientific research capabilities, and other activities.
As priorities shift and as regional and global economies change, Congress may consider policy options for addressing
economic disparities between stakeholder groups, assisting lagging regions, and providing disaster assistance and economic
relief to individuals and businesses. Continued interest in economic development may also warrant more extensive analysis
of the role of the federal government, the level of federal assistance, how federal programs are administered and coordinated
across agencies, and the accessibility, impact, and distribution of existing programs. Congress may seek to evaluate the
criteria, vehicles, priorities, and other allocation methodology for the overall portfolio of federal programs as well as for
individual programs.
Congressional Research Service
Federal Resources for State and Local Economic Development
Contents
Introduction ..................................................................................................................................... 1
The Diversification of Economic Development over Time ...................................................... 4
Strategies and Activities ............................................................................................................ 7
How Are Federal Economic Development Resources Distributed? ................................................ 8
Federal Partnership Model ........................................................................................................ 8
Federal Economic Development Programs and Agencies ........................................................ 8
Federal Regional Commissions................................................................................................ 11
Related Agencies ..................................................................................................................... 12
Program Structures and Purposes............................................................................................ 13
Programs for Distressed Areas .......................................................................................... 13
Programs for Economic Adjustment Assistance and Post-Disaster Economic
Recovery ........................................................................................................................ 15
Program Eligibility Criteria and Funding Considerations ....................................................... 16
Grant Programs ................................................................................................................. 17
Credit Assistance Programs .............................................................................................. 18
Incentives Through Tax Policies ....................................................................................... 20
Common Strategies Supported by Federal Economic Development Programs ............................ 21
Infrastructure ........................................................................................................................... 21
Workforce Development ......................................................................................................... 22
Business Assistance and Development ................................................................................... 23
Entrepreneurship and Innovation ...................................................................................... 25
Science- and Technology-Based Economic Development................................................ 26
Policy Considerations .................................................................................................................... 30
Tables
Table 1. Selected Federal Agencies that Administer Programs with Economic
Development Objectives .............................................................................................................. 9
Table 2. Active Federal Regional Commissions ............................................................................ 12
Table 3. Selected Grant Programs for Economic Adjustment Assistance and Post-Disaster
Economic Recovery ................................................................................................................... 15
Table 4. Selected Programs for Workforce Development ............................................................. 23
Table 5. Selected Programs for Business Development, Including Entrepreneurship
Assistance, Export Assistance, and Access to Capital Activities ............................................... 27
Table A-1. Selected Programs for General Economic Development, Including
Infrastructure and Revitalization Activities ................................................................................ 34
Appendixes
Appendix. Federal Assistance for State and Local Economic Development Activities ................ 34
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Federal Resources for State and Local Economic Development
Contacts
Author Information........................................................................................................................ 37
Congressional Research Service
Federal Resources for State and Local Economic Development
Introduction
Congress currently supports funding for over 130 programs to meet varied economic
development challenges and conditions, create opportunities for economic growth and job
creation, and assist a range of economic sectors, geographic regions and localities, and
demographic groups. These programs are administered by multiple federal departments and
independent federal agencies—typically in partnership with state and local stakeholders—and
oversight of them is assigned to multiple congressional committees. Many current federal
programs support infrastructure, workforce development, and business assistance activities.
Others fund planning, technical assistance, economic adjustment assistance, disaster recovery,
entrepreneurship, the development of scientific research capabilities, and other activities.1
The term “economic development” lacks a common definition and can refer both to a policy
objective as well as a set of tools to achieve that objective.2 The Department of Commerce
Economic Development Administration (EDA), for instance, describes economic development as
creating
the conditions for economic growth and improved quality of life by expanding the capacity
of individuals, firms, and communities to maximize the use of their talents and skills to
support innovation, lower transaction costs, and responsibly produce and trade valuable
goods and services.3
Economic development is also described both as a long-term process and a practice designed to
create jobs and economic activity, and as efforts designed to address equity and create wealth at
various levels (e.g., local, regional, state, national).4
1 U.S. Department of Commerce, Economic Development Administration (EDA), Economic Development Integration,
https://www.eda.gov/edi/; Nancy Green Leigh and Edward J. Blakely, Planning Local Economic Development: Theory
and Practice (Thousand Oaks, CA: Sage, 2017), p. 48; and Mark Drabenstott, “Rethinking Federal Policy for Regional
Economic Development: Agricultural and Business Conditions, Tenth Federal Reserve District.” Economic Review—
Federal Reserve Bank of Kansas City 91, no. 1 (First, 2006), p. 115, https://www.kansascityfed.org/PUBLICAT/
ECONREV/PDF/1q06drab.pdf. As discussed below, other researchers note that some federal departments and agencies
may administer programs that align with economic development goals, but do not explicitly set out to support state and
local economic development capacities, increase private investment in lagging areas, or provide models for state and
local development activities. See Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic
Development Policy in the United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of
Wisconsin Press, 1988), pp. 90-127.
2 International Economic Development Council (IEDC), Economic Development Reference Guide, p. 3,
http://www.iedconline.org/clientuploads/Downloads/IEDC_ED_Reference_Guide.pdf. Although not an official
definition, the IEDC, a membership organization of economic development professionals, described economic
development as encompassing “a program, group of policies, or activity that seeks to improve the economic well-being
and quality of life for a community, by creating and/or retaining jobs and provide a stable tax base. Ultimately,
economic development is a revenue strategy for a community, generating additional tax dollars from new business
investment.” “What Economic Development Does for a Community,” https://www.iedconline.org/clientuploads/
Downloads/IEDC_Why_and_Impact_Economic_Development.pdf.
3 EDA, “Key Definitions,” https://www.eda.gov/performance/key-definitions/. For more information, see CRS Report
R46991, Economic Development Administration: An Overview of Programs and Appropriations (FY2011-FY2021), by
Julie M. Lawhorn.
4 Karl F Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), p. 5, International
Economic Development Council (IEDC), “What Economic Development Does for a Community,”
https://www.iedconline.org/clientuploads/Downloads/IEDC_Why_and_Impact_Economic_Development.pdf; and Emil
E. Malizia and Edward Feser, Understanding Local Economic Development, (New Brunswick, NJ: Center for Urban
Policy Research, Rutgers, 1999), pp. 12-13.
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In the absence of a standard definition for economic development, goals and success are
measured by a range of metrics and at a variety of levels of practice.5 Economic development
goals, and the tools to achieve them, can vary depending on the perspective of the stakeholder and
other factors.6 Some analysts note that broadly-shared improvements in economic well-being and
quality of life are common goals of economic development.7 Still others include job quality,
equity, environmental sustainability, housing, community development, education, and similar
social objectives as goals of economic development.8 In practice, some of these goals may be in
conflict with each other.9
Historically, Congress has generally supported economic development programs that facilitate
outcomes such as changes in job-related measures, levels of private investment, tax base, and
business growth. As noted below, Congress may also support policies that seek to improve
outcomes related to community conditions or services that may indirectly contribute to economic
growth outcomes.
The federal economic development policy landscape is composed of multiple programs across
several federal agencies, employing a variety of approaches. This report highlights federal
programs associated with state and local economic development strategies that have been
identified in the following resource directories and reports:
The Office of Management and Budget’s budget functional classification system,
which includes programs involved in community and regional development in
the federal budget under category 450;10
5 By example, the EDA’s Economic Development Logic Model distinguishes between shorter-term and longer-term
outcomes, and involves measures that are in addition to jobs and investment. Longer-term, regional-level outcomes
could include business growth/survival, job growth, wage growth, revenue/sales growth, opportunities/equity, and
increased share of cluster activity. Shorter-term outcomes could include changes in metrics related to product,
production, processes, and business capacities; markets and business networks; innovation, technology transfer, and
commercialization; financing and investment; human capital and workforce development; and organizational capacity.
See EDA, “Economic Development Logic Model,” https://www.eda.gov/files/performance/EDA-New-EvaluationSystem.pdf.
6 EDA, for instance, in accordance with the Government Performance and Results Act of 1993 that, as amended by the
GPRA Modernization Act of 2010, “collects and analyzes performance measures in compliance with the Government
Performance and Results Act (GPRA), as amended by the Government Performance and Results Act Modernization
Act of 2010 (GPRAMA).” According to EDA, the agency’s performance data are divided into two primary goals: (1)
promoting private investment and job creation in economically distressed communities and regions through
infrastructure investments and (2) building community capacity to achieve and sustain regional competitiveness and
economic growth through non-infrastructure investments.” See EDA, “EDA Performance Measurement and Program
Evaluation,” https://www.eda.gov/performance/.
7 Karl F. Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), p. 5; and Stephen
Malpezzi, “Local Economic Development and Its Finance: An Introduction,” in Financing Economic Development in
the 21st Century, Routledge, 2014, pp. 3-5.
8 Nancy Green Leigh and Edward J. Blakely, Planning Local Economic Development: Theory and Practice (Thousand
Oaks, CA: Sage, 2017), pp. xviii, 36-40; and Maryann Feldman and Nichola Lowe, “Evidence-Based Economic
Development Policy,” Innovations: Technology, Governance, Globalization, vol. 11, no. 3-4 (2017), pp. 36, 46,
https://www.mitpressjournals.org/doi/pdf/10.1162/inov_a_00255.
9 Emil E. Malizia, “A Redefinition of Economic Development,” Economic Development Review, vol. 12, no. 2 (Spring
1994), pp. 83-84; Emil E. Malizia and Edward Feser, Understanding Local Economic Development (New Brunswick,
NJ: Center for Urban Policy Research, Rutgers, 1999), pp. 12-13; and Nichola Lowe and Maryann P. Feldman,
“Breaking the Waves: Innovating at the Intersections of Economic Development,” Economic Development Quarterly,
vol. 32, no. 3 (August 2018).
10 Budget category 450 includes major discretionary programs administered by EDA, the Department of Housing and
Urban Development (HUD; e.g., Community Development Block Grant (CDBG) program), the Department of
Agriculture (USDA), and the Department of the Interior (DOI; e.g., Bureau of Indian Affairs programs), and federal
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Federal agency resource directories associated with economic development and
business development;11 and
Other government reports, which analyze aspects of federal departments,
agencies, or programs associated with economic development.12
This report provides a broad overview of available resources and potential metrics that Congress
can use to compare various programs. Following a brief, abbreviated history of economic
development policy, this report discusses the characteristics of major federal programs and
services that assist with state and local activities. This report concludes with considerations for
policymakers. The report includes a variety of resource lists:
Table 1 is a summary of selected federal agencies, and Table A-1 in the
Appendix lists federal programs for state and local economic development
activities, including planning, technical assistance, infrastructure, and
revitalization activities.
Table 2 lists the active federal regional commissions and their missions and
service areas.
Table 3 provides a summary of programs to assist with economic adjustment
assistance and post-disaster economic recovery.
Table 4 provides a summary of selected workforce development programs
designed to help individuals achieve longer-term economic outcomes, such as
higher income or education or skill levels through education and job training
activities.
regional commissions, but does not include all physical infrastructure, workforce development, innovation, business
development, and other programs frequently associated with the implementation of state and local economic
development plans and strategies. The budget category 450 includes eight tax expenditures. According to the House
Budget Committee, the three largest tax expenditures are the New Markets Tax Credit, Opportunity Zones, and
exclusion of interest for public activity bonds. Budget subfunctions within budget category 450 include 451
(community development) and 452 (regional development). Budget category 450 also includes subfunction 453 for
disaster relief and insurance programs such as FEMA’s Disaster Relief Fund (DRF), which are not covered in this
report. For more information on budget category 450, see U.S. Congress, House Committee on the Budget, “Focus on
Function 450 – Community and Regional Development,” https://budget.house.gov/focus-function-450-community-andregional-development-0; and CRS Report R41726, Discretionary Budget Authority by Subfunction: An Overview, by D.
Andrew Austin.
11 By example, EDA’s Economic Development Integration initiative compiled a directory of selected federal programs
that can support state and local economic development and related strategies. The directory includes 131 programs
administered by 23 federal departments and independent federal agencies (https://www.eda.gov/edi/). The USDA Rural
Development’s “Business Programs” directory includes 13 Rural Development programs (https://www.rd.usda.gov/
programs-services/all-programs/business-programs).
12 Reports by GAO on federal economic development programs have identified multiple federal agencies, departments,
and programs. For instance, GAO’s 2019 analysis of economic adjustment assistance included programs administered
by the Departments of Agriculture, Commerce, Defense, Labor, and the Treasury and by one of the federal regional
commissions (see Economic Adjustment Assistance: Federal Programs Intended to Help Beneficiaries Adjust to
Economic Disruption, GAO-19-85R, March 5, 2019, https://www.gao.gov/assets/700/697222.pdf). Additionally,
GAO’s 2011 report on economic development programs included four federal agencies—Agriculture, Commerce,
HUD, and the Small Business Administration (SBA) (see Efficiency and Effectiveness of Fragmented Economic
Development Programs Are Unclear, GAO-11-477R, May 2011, p. 2, https://www.gao.gov/products/GAO-11-477R);
and GAO’s 2006 report on rural economic development included programs administered by the Departments of
Agriculture, Commerce, Defense, HUD, Health and Human Services (HHS), the Interior, Labor, and Transportation;
the SBA; the Environmental Protection Agency (EPA); and three federal regional commissions (see Rural Economic
Development, More Assurance Is Needed That Grant Funding Information Is Accurately Reported, GAO-06-294,
February 2006, https://www.gao.gov/assets/250/249113.pdf).
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Table 5 provides a summary of programs for business technical assistance.
Several programs provide assistance to businesses or to intermediary support
organizations and other stakeholders that support business development efforts.
Disaster assistance programs for businesses and individuals, as well as other programs designed
primarily to serve individuals or workers are beyond the scope of this report. Housing,
community development, and most education programs are also excluded from this report, but are
considered major components of economic development planning by many policymakers,
practitioners, and researchers.
The Diversification of Economic Development over Time13
Changes in economic development policy reflect changes in markets, industries, and
demographics as well as shifting priorities and ideas about what drives economic growth.14 The
following abbreviated review of economic development in the United States provides context for
the current portfolio of federal programs and the federalism that underpins most strategies.
From the mid-19th through the mid-20th century, the approach to economic development
supported by federal policy and state and local practices focused on physical infrastructure,
business recruitment, and industrial growth.15 Investments were episodic and the number of
communities receiving assistance was limited. During this time, federal assistance helped
establish and expand basic infrastructure by constructing or improving land, roads, railroads,
utility systems, and buildings. Congress also authorized programs and established agencies to
expand rural economic development and provide electricity service to rural areas.16 Economic
13 For more information, see Steven C. Deller and Stephan J. Goetz. “Historical Description of Economic Development
Policy,” in Targeting Regional Economic Development, ed. Stephan J. Goetz, Steven Deller, and Tom Harris (New
York: Routledge, 2009), pp. 17-34; Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic
Development Policy in the United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of
Wisconsin Press, 1988), pp. 55-128; Nancy Green Leigh and Edward J. Blakely, Planning Local Economic
Development: Theory and Practice (Thousand Oaks, CA: Sage, 2017), pp. 36-63; Martin D. Abravanel, Nancy M.
Pindus, and Brett Theodos, “Evaluating Community and Economic Development Programs: A Literature Review to
Inform Evaluation of the New Markets Tax Credit Program,” Urban Institute, prepared for U.S. Department of the
Treasury Community Development Financial Institutions (CDFI) Fund, September 2010, https://www.urban.org/sites/
default/files/publication/29416/412271-evaluating-community-and-economic-development-programs.pdf; Ann
Markusen and Amy Glasmeier, “Overhauling and Revitalizing Federal Economic Development Programs,” Economic
Development Quarterly, vol. 22, no. 2 (May 2008), pp. 84-85; and Mark Drabenstott, “Rethinking Federal Policy for
Regional Economic Development: Agricultural and Business Conditions, Tenth Federal Reserve District,” Economic
Review—Federal Reserve Bank of Kansas City, vol. 91, no. 1 (2006), pp. 124-128, https://www.kansascityfed.org/
PUBLICAT/ECONREV/PDF/1q06drab.pdf.
14 Nancy Green Leigh and Edward J. Blakely, Planning Local Economic Development: Theory and Practice (Thousand
Oaks, CA: Sage, 2017), pp. 56-63; and Steven C. Deller and Stephan J. Goetz, “Historical Description of Economic
Development Policy,” in Targeting Regional Economic Development, ed. Stephan J. Goetz, Steven Deller, and Tom
Harris (New York: Routledge, 2009), p. 19.
15 Ted K. Bradshaw and Edward J. Blakely, “What Are ‘Third-Wave’ State Economic Development Efforts? From
Incentives to Industrial Policy,” Economic Development Quarterly, vol. 13, no. 3 (August 1999), p. 231.
16 Examples of federal involvement in state and local economic development during this time include the land grant
universities in the nineteenth century, the establishment of the U.S. Department of Agriculture (USDA) in 1862, the
Snyder Act of 1921, and the Housing Acts of 1937 and 1949, among others. Early rural programs included the Rural
Resettlement Administration, as well as the USDA’s Rural Electrification Administration, Rural Development
Assistance Program, Rural Utilities Service, and Farmers Home Administration, and the Tennessee Valley Authority
(est. 1933).
For additional information, see Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic
Development Policy in the United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of
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development programs at the local, state, and federal levels generally supported efforts to create a
favorable business climate by lowering production costs and taxes or incentivizing capital
investment in specific locations. State and local strategies during this time often prioritized
recruiting a firm or industry to a new area through tax credits, incentives, and business site
improvements over other activities, such as human capital development or entrepreneurial
assistance. The emphasis on industrial development and business recruitment is often referred to
as “smokestack chasing.”17
Following World War II, the types of federal development assistance available to state and local
stakeholders shifted and programs expanded. State and local economic development practitioners
increasingly sought to expand capital sources and new markets for goods and services in order to
facilitate business growth. This marked a shift from attraction-based strategies that primarily
sought to improve an area’s competitive position—often through incentives, subsidies, or capital,
land, or labor enhancements. Through these changes, many viewed the government as having a
role in facilitating and anticipating opportunities.18
During the 1950s, 1960s, and 1970s, Congress authorized programs and appropriated funding for
several urban redevelopment/urban renewal, regional planning, and related programs that targeted
economically distressed areas.19 In addition, the Small Business Act of 1953 created the Small
Business Administration to “aid, counsel, assist and protect, insofar as is possible, the interest of
small business concerns.” In 1965, Congress passed legislation authorizing both the Appalachian
Regional Commission (ARC) and the Economic Development Administration (EDA).20 In 1965,
Congress also established the Department of Housing and Urban Development (HUD), and
appropriated funds for area development, housing, and urban redevelopment/renewal programs.21
In 1974, Congress consolidated several HUD programs into the Community Development Block
Wisconsin Press, 1988), pp. 91-93.
17 Steven G. Koven and Thomas S. Lyons, Economic Development: Strategies for State and Local Practice
(Washington, DC: International City/County Management Association Press, 2010), p. 117.
18 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 9-12, 76, 124-125, 227-229; and Nancy Green Leigh and Edward J. Blakely, Planning Local Economic
Development: Theory and Practice (Thousand Oaks, CA: Sage, 2017), p. 99.
19 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 91-96; and Steven C. Deller and Stephan J. Goetz, “Historical Description of Economic Development Policy,”
in Targeting Regional Economic Development, ed. Stephan J. Goetz, Steven Deller, and Tom Harris (New York:
Routledge, 2009), p. 25. For a discussion of the origins of the federal public housing programs and select urban
redevelopment programs, including urban renewal programs, see CRS Report R41654, Introduction to Public Housing,
by Maggie McCarty.
20 The Appalachian Regional Commission (ARC) was authorized by the Appalachian Regional Development Act
(ARDA) (P.L. 89-4). EDA was authorized by the Public Works and Economic Development Act of 1965 (P.L. 89136).
21 HUD programs associated with urban renewal/redevelopment from this time period include the Model Cities and the
Urban Development Action Grant (UDAG) programs, among others. The Demonstration Cities and Metropolitan
Development Act of 1966 (P.L. 89-754) authorized the Model Cities program. The Housing and Community
Development Act of 1977 (P.L. 95-128) authorized HUD’s UDAG program for “severely distressed cities and urban
counties to help alleviate physical and economic deterioration.” Some scholars have noted that although the law that
authorized UDAG did not include the term “economic development” it conveyed a strategy focused on attracting
private investment to urban areas. See The Rise of the Entrepreneurial State: State and Local Economic Development
Policy in the United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin
Press, 1988), p. 114.
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Grant (CDBG) program.22 In the late 1960s and early 1970s, Congress also authorized legislation
for many of USDA’s current grant and loan programs that support rural economic development.23
Following World War II, the level of federal development assistance to state and local
stakeholders expanded, and then decreased in the 1980s and 1990s.24 In the following decades,
state and local strategies as well as federal programs evolved to incorporate efforts to address
structural changes in the U.S. economy caused by demographic shifts, increased levels of global
trade, and the shift from manufacturing to service sectors. Government programs focused on
efforts that increased or developed capital sources and new markets for goods and services, and
that supported new businesses and business growth. In the 1990s, Congress authorized programs
at several federal agencies for regional efforts to develop and expand industry clusters.25 In the
1990s and 2000s, state and local economic development practitioners increasingly networked,
coordinated, and brokered information in order to promote regional economic competitiveness in
light of challenges presented by globalization, trade policies, and other factors affecting the U.S.
and regional economies in new ways.26
Over time, the strategies for economic development have increased and diversified.27 Federal
economic development policies continue to support state and local strategies for infrastructure
development, but also include business recruitment and retention, workforce development, and
capital access activities. At the same time, new and modified federal programs seek to support
knowledge and technology industries, build globally competitive regions, develop resilient
networks and “ecosystems” of various distinctions (e.g., entrepreneurial, capital, innovation), and
build capacity at multiple levels.28 Current economic development programs continue to be state
22 See the Housing and Community Development Act of 1974 (P.L. 93-383).
23 See CRS Report RL31837, An Overview of USDA Rural Development Programs, by Tadlock Cowan; CRS Report
R41241, Economic Development Administration: A Review of Elements of Its Statutory History, by Julie M. Lawhorn;
and CRS Report R46991, Economic Development Administration: An Overview of Programs and Appropriations
(FY2011-FY2021), by Julie M. Lawhorn.
24 The overall decline in the amount of federal aid to state and local governments—often traced to beginning around
1978—is described by Peter K. Eisinger in The Rise of the Entrepreneurial State: State and Local Economic
Development Policy in the United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of
Wisconsin Press, 1988), pp. 85-86; and “Congress Asserts Its Authority: The Devolution Revolution That Wasn’t,
1980-2000” in CRS Report R40638, Federal Grants to State and Local Governments: A Historical Perspective on
Contemporary Issues, by Robert Jay Dilger.
25 Clusters are often defined as geographic concentrations of interconnected companies and institutions located in a
specific area that may both cooperate and compete. The connections and/or proximity of the clusters can be considered
advantageous for companies if they leverage workforce, human capital, supply chain, and other spillovers. For more
information, see Michael E. Porter, “Clusters and the New Economics of Competition,” Harvard Business Review, vol.
76, no. 6 (November-December 1998), pp. 77-90, https://hbr.org/1998/11/clusters-and-the-new-economics-ofcompetition; and Ryan Donahue, Joseph Parilla, and Brad McDearman, “Rethinking Industry Clusters,” Brookings
Institution, July 25, 2018, https://www.brookings.edu/research/rethinking-cluster-initiatives/.
26 Robert J. Stimson, Roger R. Stough, and Brian H. Roberts, Regional Economic Development: Analysis and Planning
Strategy (Berlin, Heidelburg, New York: Springer Science and Business Media, 2006), p. 58; and Ted K. Bradshaw
and Edward J. Blakely, “What Are ‘Third-Wave’ State Economic Development Efforts? From Incentives to Industrial
Policy,” Economic Development Quarterly, vol. 13, no. 3 (August 1999), pp. 230-231, 243.
27 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 122-123.
28 EDA, “The Evolution of Economic Development,” EDA Newsletter, August 2015, https://www.eda.gov/archives/
2016/news/blogs/2015/08/01/highlight.htm#highlight-read-more; Nancy Green Leigh and Edward J. Blakely, Planning
Local Economic Development: Theory and Practice (Thousand Oaks, CA: Sage, 2017), pp. 99; and Ross Brown and
Colin Mason, “Looking Inside the Spiky Bits: A Critical Review and Conceptualisation of Entrepreneurial
Ecosystems,” Small Business Economics, vol. 49, no. 1, 2017, pp. 11-30.
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and local government-centered with “decentralized federal participation,” and aim to assist state
and local stakeholders in their efforts to attract private investment, create jobs, build wealth,
address inequities, diversify their tax bases, and related goals.29
Strategies and Activities
The parameters of what constitutes economic development—as well as its benefits and
limitations—are defined differently depending on the stakeholder, the context of implementation,
and other factors. The process and practice of economic development may occur at the local,
state, regional, or federal level, and can be carried out by public and private sector stakeholders
and institutions. State and local stakeholders generally utilize federal financial assistance and
other resources to implement economic development strategies, including, but not limited to
investment in infrastructure, community amenities, and utilities;
industrial development and recruitment;
support for small- and medium-sized business formation, including
entrepreneurial assistance, business support, acceleration, and incubation
strategies;
existing industry and capital expansion;
trade promotion;
regional industry specialization and network development;
regional economic diversification;
workforce development and human capital development;
planning, technical assistance, capacity-building, and leadership training;
technology- and innovation-based economic development; and
the promotion of natural, cultural, and historic assets.30
Given that many federally supported economic development projects originate at the state and
local levels, the capacity of state and local stakeholders to address economic drivers and global
market trends, among other factors, is increasingly recognized as a critical factor in determining
the relative success of federal programs. The EDA-commissioned report, “Economic
29 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 4, 90, 101.
30 This is not intended to be a comprehensive list of state and local strategies. For more information on strategies, see
IEDC, Economic Development Reference Guide, pp. 4-68; and Steven G. Koven and Thomas S. Lyons, Economic
Development: Strategies for State and Local Practice (Washington, DC: International City/County Management
Association Press, 2010). Reports by the U.S. Government Accountability Office (GAO) acknowledge the lack of a
common definition for economic development, and, in its absence, list nine common economic development activities.
According to GAO, the nine activities were selected because they lead directly to an area’s development as measured
by outcomes such as jobs created. These activities include support for: entrepreneurial efforts, physical infrastructure to
attract industry, plans and strategies, commercial buildings, new markets for products and industries,
telecommunications and broadband, business incubators, industrial parks and buildings, and tourism. See U.S.
Government Accountability Office (GAO), Efficiency and Effectiveness of Fragmented Economic Development
Programs Are Unclear, GAO-11-477R, May 2011, p. 5, https://www.gao.gov/products/GAO-11-477R; Rural
Economic Development, More Assurance Is Needed That Grant Funding Information Is Accurately Reported, GAO06-294, February 24, 2006, https://www.gao.gov/assets/250/249113.pdf; and Economic Development: Multiple Federal
Programs Fund Similar Economic Development Activities, GAO/RCED/GGD-00-220, September 29, 2000,
https://www.gao.gov/new.items/r200220.pdf.
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Development: A Definition and Model for Investment,” issued in 2016, suggests that developing
the capacity of stakeholders (e.g., firms, individuals, industries, institutions) broadly aids in
economic development because it expands the capabilities of economic actors.31 EDA uses the
terms “capacities” and “capacity building” to “refer to the public sector’s role in investing in new
ideas, knowledge transfer, and infrastructure to build a foundation so that the private sector can
flourish (i.e., enable economic development to promote regional prosperity).”32
How Are Federal Economic Development Resources
Distributed?
Federal Partnership Model
Federal assistance for state and local economic development is often based on the principle that
the national economy represents a “summation of the performance of hundreds of local
economies.”33 In recognition that the economic development needs vary, sometimes greatly, from
place to place and from sector to sector, most federal economic development programs now assist
with projects developed from state and local plans, priorities, and input. In establishing the EDA,
the Public Works and Economic Development Act of 1965 (P.L. 89-136), as amended, recognized
economic development as an “inherently local process,” and the role of the federal government as
a key partner.34 In its Value Proposition, EDA notes that “instead of a Washington-knows-best
approach, EDA works hand-in-hand with local economic development partners to advance their
locally-developed projects which are linked to the region’s long-term, sustainable economic
development strategy.”35 Other federal agencies generally take a similar approach whereby
economic development projects typically originate at state and local levels and nonfederal
stakeholders select strategies or industries to pursue in order to address their community-specific
needs and opportunities.36
Federal Economic Development Programs and Agencies
Because economic development is a complex, multi-faceted process and practice, Congress has
authorized multiple agencies and programs to meet its economic development policy goals.
31 Maryann Feldman et al., “The Logic of Economic Development: A Definition and Model for
Investment,” Environment and Planning C: Government and Policy, vol. 34, no. 1 (2016), pp. 5-21. Also available at
https://www.eda.gov/files/tools/research-reports/investment-definition-model.pdf. The report defines economic
development as “the development of capacities that expand economic actors’ capabilities.”
32 EDA, “Comprehensive Economic Development Strategy,” https://www.eda.gov/ceds.
33
Stephen Malpezzi, “Local Economic Development and Its Finance: An Introduction,” in Financing Economic
Development in the 21st Century, Routledge, 2014, p. 3.
34 42 U.S.C. §3121.
35 EDA, “Value Proposition,” https://www.eda.gov/about/Value-Proposition.htm.
36 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 122-127.
Stakeholders are frequently state governments and units of local governments, but can include regional development
organizations (RDOs), community development corporations (CDCs), community development financial institutions
(CDFIs) or other financial institutions, educational institutions, or nonprofit or for-profit organizations with economic
development missions.
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Federal economic development programs are designed to meet several goals, including federal
objectives related to promoting interstate commerce and national economic growth.37 Economic
development may be an agency’s primary mission or it may be more indirectly related. The
Department of Commerce (DOC) Economic Development Administration (EDA) is the only
federal agency with economic development as its exclusive mission.38 The Departments of
Agriculture (USDA), Commerce, and Housing and Urban Development (HUD), and the Small
Business Administration (SBA) also administer economic development programs and are
generally considered core federal economic development agencies. Additionally, the Department
of Labor (DOL) and the Department of the Treasury administer programs that support workforce
and business development, which are often considered integral components of economic
development.
Table 1. Selected Federal Agencies that Administer Programs with Economic
Development Objectives
Agency
Selected Programs
Mission
USDA, various agencies
including Rural
Development and its
mission areas:
The agency administers multiple
programs, including
To help improve the economy and
quality of life in rural America.
Rural Business Service
(RBS)
Rural Utilities Service
(RUS)
Rural Housing Service
(RHS)
Commerce, Economic
Development
Administration (EDA)
RBS’s Business; Cooperative; Energy;
and Community and Economic
Development programs
RUS’s Electric; Telecommunications;
and Water and Environmental
programs
RHS Community Facilities programs
EDA administers multiple programs,
including
Build to Scale/Regional Innovation
Strategies
Economic Adjustment Assistance
Local Technical Assistance
Partnership Planning
Public Works
STEM Talent Challenge
Trade Adjustment Assistance for
Firms
University Centers
Other programs and services that
support technical assistance,
innovation, and research initiatives.
To lead the federal economic
development agenda by promoting
innovation and competitiveness,
preparing American regions for
growth and success in the
worldwide economy.
37 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 122-127.
38 EDA, “About,” https://www.eda.gov/about/.
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Agency
Selected Programs
Mission
Commerce, additional
agencies (other than EDA)
Programs and services administered by
Commerce include International Trade
Administration (ITA), National Institute of
Standards and Technology (NIST),
National Telecommunications and
Information Administration (NTIA),
Minority Business Development Agency
(MBDA), and others.
To create the conditions for
economic growth and opportunity.
Housing and Urban
Development (HUD),
Office of Community
Planning and Development
(CPD)
CPD administers multiple programs,
including
To develop viable communities by
promoting integrated approaches
that provide decent housing, a
suitable living environment, and
expand economic opportunities
for low- and moderate-income
persons. The primary means
toward this end is the
development of partnerships
among all levels of government
and the private sector, including
for-profit and nonprofit
organizations.
Labor, Employment and
Training
Administration (ETA)
ETA administers multiple employment
and training programs authorized under
the Workforce Innovation and
Opportunity Act (WIOA; P.L. 113-128).
Under WIOA, Title I (Workforce
Development Activities) programs include
Community Development Block
Grant (CDBG)
Section 108 Loan Guarantee
Program and others
State formula grants for employment
and training activities for youth,
adults, and dislocated workers
National Dislocated Worker Grants
To contribute to the more
efficient functioning of the U.S.
labor market by providing highquality job training, employment,
labor market information, and
income maintenance services
primarily through state and local
workforce development systems.
Programs for specific populations,
such as Job Corps; YouthBuild;
Native American Employment and
Training; National Farmworker Jobs
program; and others
Additional employment and training
programs and services administered by
ETA include Community Service
Employment for Older Americans, the
Employment Service, Trade Adjustment
Assistance (TAA) for Workers, among
others.
Treasury, Community
Development Financial
Institutions (CDFI) Fund
Congressional Research Service
Treasury/CDFI administers multiple
programs, including
Capital Magnet Fund
Native Initiatives
CDFI Bond Guarantee Program
CDFI Program
Bank Enterprise Award Program
New Markets Tax Credit Program
and others
To expand economic opportunity
for underserved people and
communities by supporting the
growth and capacity of a national
network of community
development lenders, investors,
and financial service providers.
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Federal Resources for State and Local Economic Development
Agency
Selected Programs
Mission
Small Business
Administration (SBA)
The SBA administers multiple programs,
including
To maintain and strengthen the
nation’s economy by enabling the
establishment and viability of small
businesses and by assisting in the
economic recovery of
communities after disasters.
Entrepreneurial
development programs, such as the
Small Business Development
Centers, Native American Outreach,
Veterans Outreach, Microloan
Technical Assistance, SCORE, and
others
Capital access programs, such as the
7(a) Loan Guarantees, 504 Certified
Development Company Loans,
international trade and export
promotion programs, Microloan
program, and others
Contracting programs, such as the
8(a) program, the Historically
Underutilized Business Zones
(HUBZones) program, ServiceDisabled Veteran-Owned Small
Business programs, Women-Owned
Small Business programs, and others
Capital Investment Programs, such as
the Small Business Investment
Corporation (SBIC), Small Business
Innovation Research/Small Business
Technology Transfer, and others
Disaster assistance
Sources: Compiled by CRS from the Departments of Agriculture (USDA), Commerce (DOC), Labor (DOL),
Housing and Urban Development (HUD), and Treasury and the Small Business Administration (SBA) websites;
CRS Report RL33243, Small Business Administration: A Primer on Programs and Funding, by Robert Jay Dilger; and
GAO, Employment and Training Programs, GAO-19-200, March 2019, https://www.gao.gov/products/GAO-19-200.
Notes: As noted, the categorization of federal departments, agencies, and programs associated with economic
development varies. This report includes many of the programs associated with planning, technical assistance,
physical infrastructure, workforce development, business development (including entrepreneurship and
innovation), and economic adjustment assistance programs, and excludes most community development,
housing, and education programs. Workforce development programs include the employment and training
programs authorized by Title I of the Workforce Innovation and Opportunity Act (WIOA; P.L. 113-128), the
primary federal workforce development law. Title I authorizes many of WIOA’s workforce development
activities through the Adult, Dislocated Worker, and Youth programs administered by DOL. Congress
authorized Titles II-IV of WIOA to address adult education, the Employment Service, and vocational
rehabilitation, which are not listed here. Additionally, Congress has authorized other employment and training,
vocational rehabilitation, postsecondary career and technical education (CTE), and related programs that are
administered by EDA, the Department of Education, HUD, HHS, DOL, the Department of the Interior, SBA, the
Social Security Administration, USDA, the Department of Veterans’ Affairs, and other agencies.
Federal Regional Commissions
The active federal regional commissions (the Appalachian Regional Commission, the Denali
Commission, the Delta Regional Authority, and the Northern Border Regional Commission) also
focus on economic development (see Table 2).39 Active federal regional commissions receive
39 In December 2021, the U.S. Senate confirmed the first federal co-chair for the Southeast Crescent Regional
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partial federal funding and are considered independent federal agencies. For more information,
see CRS Report R45997, Federal Regional Commissions and Authorities: Structural Features
and Function, by Julie M. Lawhorn.
Table 2. Active Federal Regional Commissions
Agency
Areas Served/Eligibility
Mission
Appalachian Regional
Commission (ARC)
423 designated counties in Alabama,
Georgia, Kentucky, Maryland, Mississippi,
New York, North Carolina, Ohio,
Pennsylvania, South Carolina, Tennessee,
Virginia, and West Virginia
To innovate, partner, and invest to build
community capacity and strengthen
economic growth in Appalachia.
Delta Regional
Authority (DRA)
252 designated counties and parishes in
Alabama, Arkansas, Illinois, Kentucky,
Louisiana, Mississippi, Missouri, and
Tennessee
To improve regional economic
opportunity by helping to create jobs,
build communities, and improve the lives
of the 10 million people.
Denali Commission
The state of Alaska
To provide infrastructure, job training
and to support economic development.
Northern Border
Regional Commission
(NBRC)
60 counties in northern Maine, New
Hampshire, Vermont, and New York
To catalyze regional, collaborative, and
transformative community economic
development approaches that alleviate
economic distress and position the
region for economic growth.
Source: Compiled by CRS from the Appalachian Regional Commission, the Denali Commission, the Delta
Regional Authority, and the Northern Border Regional Commission websites.
Note: See CRS Report R45997, Federal Regional Commissions and Authorities: Structural Features and Function, by
Julie M. Lawhorn.
Related Agencies
In addition to the federal agencies, federal regional commissions, and programs noted in
“Program Structures and Purposes,” Congress has authorized other agencies to administer
programs that create conditions to support economic development outcomes. These programs
may incentivize private investment; contribute to a community’s quality of place; improve
individuals’ wellbeing, income, or job prospects; or advance other measures of economic
development. The Departments of Defense (DOD), Education (ED), Energy (DOE), Health and
Human Services (HHS), the Interior (DOI), and Transportation (DOT) as well as the U.S.
Environmental Protection Agency (EPA) and other agencies may also support economic
development. Programs administered by these agencies are primarily authorized to address other
purposes such as land use, transportation, education, environmental remediation, health, livability,
and other amenities, conditions, or events.40 For instance, infrastructure investments funded by
the Department of Transportation contribute to local, state, and national economic development
goals.
Commission, but it has yet to convene its members or engage in economic development activities in its service area.
The Southwest Border Regional Commission is authorized, but not active.
40 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988), p.
90.
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Program Structures and Purposes41
Congress has authorized both people- and place-based implementation approaches for economic
development programs. In economic development, these approaches are sometimes framed as
people-to-jobs or jobs-to-people policies.42
Programs that have a geographic dimension targeting assistance to a specific area are often
referred to as place-based policies. Place-based policies tend to target assistance toward labor
markets, neighborhoods, regions, and specific geographies, rather than by providing support
directly to individuals. Place-based policies often, but not always, target the geographic and
spatial dimension of economic distress and poverty. Place-based policies may include
infrastructure programs, revitalization programs, and certain tax policies that incentivize
investment in a specific area, among others. Place-based people policies include initiatives that
seek to address the markets, conditions, or policies in or near areas where disadvantaged people
live and are considered a subset of place-based policies.
Programs that direct assistance to individuals or disadvantaged individuals are referred to as
people-based programs. Analysts frame people-based approaches as tools that offer a direct line
of assistance to individuals, generally without conditions tied to a place or individuals’ locations.
People-based policies include some forms of workforce development, job training, and education
assistance programs, among others.43
Programs for Distressed Areas
As noted, place-based policies include initiatives designed to address conditions of long-term
economic distress (e.g., persistent poverty, high unemployment levels, and other socioeconomic
indicators) in specific geographic areas. Conditions of long-term economic distress can have a
long-term impact on individuals, the state and local tax base, the workforce, health outcomes, and
more.44 Initiatives to address conditions of long-term economic distress may involve multiple
forms of assistance due to the sustained impacts of jobs loss and disinvestment on the social and
economic health of a regional economy.
Congress has authorized several programs designed to help state and local stakeholders address
conditions of long-term economic distress, in addition to the programs designed to address
41 For more information, see David Neumark and Helen Simpson, “Place-Based Policies,” in Handbook of Regional
and Urban Economics, ed. Giles Duranton, J. Vernon Henderson, and William Strange (Elsevier: Amsterdam,
Netherlands, 2015), pp. 1197-1287; and Randall Crane and Michael Manville, “People or Place? Revisiting the Who
Versus the Where of Urban Development,” Lincoln Institute of Land Policy, Land Lines, July 2008,
https://www.lincolninst.edu/sites/default/files/pubfiles/1403_719_lla080702.pdf. For a discussion of local economic
development, place-based policies, see Timothy Bartik, “Bringing Jobs to People: Improving Local Economic
Development Policies,” Upjohn Institute Working Paper No. 2020-023 (Kalamazoo, MI: W.E. Upjohn Institute for
Employment Research), 2020, https://research.upjohn.org/cgi/viewcontent.cgi?article=1022&context=up_policypapers.
42 Timothy J. Bartik, “Jobs, Productivity, and Local Economic Development: What Implications Does Economic
Research Have for The Role of Government?” National Tax Journal, vol. 47, no. 4 (1994), p. 852,
http://www.jstor.org/stable/41789113.
43 The Earned Income Tax Credit (EITC) is often cited as an example of a people-based policy that targets
disadvantaged individuals. For more information about the EITC, see CRS Report R43805, The Earned Income Tax
Credit (EITC): How It Works and Who Receives It, by Margot L. Crandall-Hollick, Gene Falk, and Conor F. Boyle. For
an example of a people-based strategy, see Michael R Strain, “Pay Workers to Leave Depressed Towns,” Bloomberg
Opinion, December 23, 2019.
44 Timothy Bartik, “Bringing Jobs to People: Improving Local Economic Development Policies,” Upjohn Institute
Working Paper No. 2020-023 (Kalamazoo, MI: W.E. Upjohn Institute for Employment Research), 2020, p. 6.
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economic recovery needs following an economic shock, dislocation, or disaster event (see Table
3).45 These programs may base eligibility on geographic designations by Congress or by other
state or federal agencies or officials, or by economic distress criteria:
CDFI Fund programs and tax credit policies often target distressed areas or zip
codes.
Prospective participants in the Opportunity Zones program must direct
investment to designated census tracts nominated by the state’s governor and
meet specified economic criteria.46
The programs administered by regional commissions and authorities seek to
build economic resiliency or support economic restructuring in economically
distressed regions, such as the Delta and Appalachia areas.47
Projects are generally eligible for EDA’s Public Works and Economic
Adjustment Assistance (EAA) funding if the service areas meet the criteria for
economic distress and other criteria.48
The programs administered by the Department of the Interior, Bureau of Indian
Affairs, Office of Indian Energy and Economic Development and HUD’s Indian
Community Development Block Grant (ICDBG) program are available to tribal
entities. Some programs may provide assistance to areas that have experienced
long-term economic distress.
As noted, Congress may also approve legislation that directs assistance from existing programs to
economically distressed areas (e.g., areas with high unemployment or high poverty levels for a
certain period of time). For instance, appropriations for select programs authorized in the
American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) and other programs in
subsequent appropriations bills have included provisions to address persistent poverty counties.
The “10-20-30” provision was designed to direct 10% of federal funds for specific programs to
counties with 20% poverty rates or more for the past 30 years.49
45 Community economic distress is often measured by persistent levels of poverty, high unemployment, low household
or individual incomes, or similar metrics.
46 To become a qualified Opportunity Zone, a census tract must be nominated by the state’s governor to the Secretary
of the Treasury and “must have been either (1) a qualified low-income community (LIC), using the same criteria as
eligibility under the New Markets Tax Credit (NMTC), or (2) a census tract that was contiguous with a nominated LIC
if the median family income of the tract does not exceed 125% of that contiguous, nominated LIC.” For additional
information, see CRS Report R45152, Tax Incentives for Opportunity Zones, by Sean Lowry and Donald J. Marples.
47 As noted, federal regional commissions and authorities, such as the Appalachian Regional Commission, the Delta
Regional Authority, the Denali Commission, and the Northern Border Regional Commission, provide assistance only
to projects in congressionally-designated counties in their service area. For more information, see CRS Report R45997,
Federal Regional Commissions and Authorities: Structural Features and Function, by Julie M. Lawhorn.
48 The criteria for economic distress are determined by the area’s unemployment rate, per capita income, or a special
need. 42 U.S.C. §3161. Other criteria include project alignment with an EDA-approved economic development
strategy. 42 U.S.C. §3162.
49 For more information, see CRS Report R45100, The 10-20-30 Provision: Defining Persistent Poverty Counties, by
Joseph Dalaker.
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Programs for Economic Adjustment Assistance and Post-Disaster Economic
Recovery
Several federal grant programs are designed to assist state and local stakeholders with economic
adjustment, economic recovery, revitalization, restructuring, rebuilding, and other activities
following economic dislocation or disaster events.50 A selection of these programs are listed in
Table 3. The programs offer flexibility to state and local stakeholders to address a range of
construction and non-construction activities in efforts to restructure or build resiliency in regional
economies.51 Congress has authorized ongoing and supplemental appropriations to support
economic adjustment or recovery in response to economic shocks and disaster events. For
instance, existing EDA programs received regular supplemental appropriations in response to
natural disasters beginning in the 1990s and in response to the Coronavirus Disease 2019
(COVID-19) pandemic in FY2020.52 Congress also authorized programs to assist communities
impacted by the Base Realignment and Closure (BRAC) process and other defense activities.53
Table 3. Selected Grant Programs for Economic Adjustment Assistance and PostDisaster Economic Recovery
Agency, Program
Program Description
Appalachian Regional Commission,
Partnerships for Opportunity and
Workforce and Economic
Revitalization (POWER) Initiative
The POWER Initiative provides economic development funding
and technical assistance to address economic distress caused by
the effects of energy transition principally in coal-impacted
communities. The POWER initiative is not permanently authorized
by Congress. For more information, see CRS Report R46015, The
POWER Initiative: Energy Transition as Economic Development, by Julie
M. Lawhorn.
Department of Defense (DOD), Office
of Local Defense Community
Cooperation (OLDCC) (formerly the
Office of Economic Adjustment)
programs
In response to Base Realignment and Closure (BRAC) and other
defense-related activities, OLDCC’s financial and technical
assistance programs support planning and implementation
activities. For more information about BRAC, see CRS Report
R45705, Base Closure and Realignment (BRAC): Background and Issues
for Congress, by Christopher T. Mann.
50 GAO developed the following definition of economic adjustment: “Economic adjustment assistance programs and
tax expenditures are those whose primary purpose includes helping or preparing workers, businesses/firms, or
communities to adjust to economic disruption, where disruption is defined as significant changes in the economy that
reduce the demand for certain workers. Examples of these changes include, but are not limited to, U.S. or international
policy decisions related to trade, defense, or energy, and other economic forces that drive changes in immigration,
globalization, automation, or cause a prolonged cyclical downturn.” See GAO, Economic Adjustment Assistance, GAO19-85R, March 5, 2019, https://www.gao.gov/assets/700/697222.pdf. For a discussion of economic shocks, conditions
of ongoing economic distress, and economic resilience faced by urban regions, see Harold Wolman, Howard Wial,
Travis St. Clair, and Edward Hill, Coping with Adversity (Ithaca: Cornell University Press, 2017).
51 The EDA defined resilience in the context of economic development as “the ability of a community or region to
anticipate, withstand, and bounce back from various disruptions to its economic base” in the FY2019 EDA Disaster
Supplemental Notice of Funding Opportunity (NOFO), p. 4, at https://www.grants.gov/web/grants/viewopportunity.html?oppId=319126. According to the EDA, economic disruptions, or shocks, manifest in various ways.
52 EDA, “2020 Disaster Assistance Brochure: Leading Economic Recovery in Disaster-Impacted Communities,”
https://www.eda.gov/files/programs/disaster-recovery/EDA-Disaster-Brochure.pdf. See also CRS Report RL31734,
Federal Disaster Assistance Response and Recovery Programs: Brief Summaries, by Maura Mullins, Maria Kreiser,
and Jared C. Nagel.
53 Department of Defense Office of Local Defense Community Cooperation (OLDCC) (formerly the Office of
Economic Adjustment), “Program Overview,” https://www.oea.gov/program-overview.
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Agency, Program
Program Description
EDA, Economic Adjustment
Assistance (EAA) program
The EAA program may assist communities and regions affected by
natural disasters, natural resource depletion, mass layoffs, and
other severe economic shocks caused by structural impacts to
regional economies. In addition to ongoing annual appropriations
for the discretionary EAA grant program, Congress has authorized
supplemental appropriations for EAA for post-disaster economic
recovery and coronavirus economic recovery efforts as well as for
the Assistance to Coal Communities (ACC) and Assistance to
Nuclear Closure Communities (NCC) initiatives. The ACC and
NCC initiatives support communities and regions that have been
negatively impacted by changes in the coal economy or by nuclear
plant closures respectively. The ACC and NCC initiatives are not
permanently authorized by Congress.
Department of Homeland Security,
Federal Emergency Management
Agency (FEMA), Community Disaster
Loans (CDL)
The CDL program offers forgivable loans to units of local
government to address revenue shortfalls following a major
disaster. For more information, see CRS In Focus IF11600, FEMA’s
Community Disaster Loan (CDL) Program: A Primer, by Erica A. Lee.
HUD, Community Development Block
Grant-Disaster Recovery (CDBG-DR)
In some instances, Congress has enacted supplemental
appropriations under CDBG authorities to provide additional
resources for unmet needs of affected communities—typically, but
not exclusively, in areas with federal emergency or disaster
declarations under the Stafford Act. These appropriations are
often referred to as CDBG-Disaster Recovery or CDBG-DR
funding. CDBG-DR is not permanently authorized by Congress.
See CRS Report R46475, The Community Development Block Grant’s
Disaster Recovery (CDBG-DR) Component: Background and Issues, by
Joseph V. Jaroscak.
Sources: Compiled by CRS from ARC, “ARC’s POWER Initiative,” https://www.arc.gov/power; DOD OLDCC,
“Program Overview,” https://www.oea.gov/program-overview); EDA, “Assistance to Coal Communities,”
https://eda.gov/coal/; EDA, “EDA Programs,” https://eda.gov/programs/eda-programs/; EDA, “EDA and Disaster
Recovery,” https://eda.gov/disaster-recovery/; DHS, FEMA, “What Is CDL?” https://www.fema.gov/sites/default/
files/2020-07/fema_what-is-community-disaster-loan-program_flyer.pdf; CRS Report R46475, The Community
Development Block Grant’s Disaster Recovery (CDBG-DR) Component: Background and Issues, by Joseph V. Jaroscak;
and GAO, Economic Adjustment Assistance: Federal Programs Intended to Help Beneficiaries Adjust to Economic
Disruption, GAO-19-85R, March 5, 2019, https://www.gao.gov/assets/700/697222.pdf.
Notes: Programs listed provide technical or financial assistance for economic recovery assistance in response to
economic shocks, base realignment or closure events, or disaster events. Programs listed are for public sector
stakeholders, including units of tribal, state, local, and regional government; nonprofit organizations; and certain
educational institutions. Workforce development, business assistance, and individual assistance programs to
address economic recovery efforts are not included. For information about short-term, economic relief—often
to certain small businesses and nonprofits—see CRS Report R44412, SBA Disaster Loan Program: Frequently Asked
Questions, by Bruce R. Lindsay. See also CRS Report R45864, Tax Policy and Disaster Recovery, by Molly F. Sherlock
and Jennifer Teefy.
Program Eligibility Criteria and Funding Considerations
Federal economic development assistance is generally delivered to state and local stakeholders
through grant, credit assistance, and tax policy programs.54 Funding strategies vary depending on
54 Grants, credit, and incentive programs are common forms of federal financial assistance. GAO, The Distribution of
Federal Economic Development Grants to Communities with High Rates of Poverty and Unemployment, GAO-12938R, September 2012, https://www.gao.gov/assets/650/648367.pdf, notes that, “The federal government supports
community and economic development through grants, loans, and tax expenditures.”
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the type of policy vehicle. For instance, many grant programs rely on congressional
appropriations. Among other considerations, federal direct loan and federal loan guarantee
programs must consider the expenses incurred by the government, or subsidy costs, when
borrowers default. Alternatively, if the loan programs create profit for the government—for
example, through fees and other assessments—they may generate negative subsidy costs. Among
other considerations, many tax policies rely on foregone tax claims.55
Program eligibility criteria also vary. As noted, some forms of federal assistance are targeted to
specific scenarios or disruptions (e.g., disaster recovery and economic adjustment assistance or
assistance for ongoing conditions of economic distress); types of recipients or beneficiaries (e.g.,
low- and moderate-income neighborhoods, workers, rural areas, students, or small businesses);
and regions or communities (e.g., areas served by federal regional commissions or tribal areas or
communities). For instance, USDA Rural Development programs target rural communities with
eligibility based on population thresholds and other program requirements. For HUD’s CDBG
program, grantees must use funds to meet one of three national objectives and at least 70% of
those funds must benefit low- or moderate-income persons.56
Grant Programs
“Federal grant programs” or “federal domestic assistance programs”—commonly referred to as
grants—are forms of financial assistance that provide money, property, services, or other items of
value for goals authorized by Congress, including economic development.57 Unlike most credit
programs, recipients of grant assistance are not required to repay funds. Congress has approved
categorical grants and block grants for federal economic development programs. Agencies
allocate funds using both competitive and formula methods.58 Depending on the statute, federal
grants for economic development may require recipients to contribute matching funds. Cost share
requirements vary by program and may depend on criteria such as levels of economic distress,
type of applicant, and other conditions. Economic development programs typically have other
Some researchers classify technical assistance and government contracting as additional types of federal assistance. See
Peter Bassine et al., Big Ideas for Small Businesses, Yale Institution for Social and Policy Studies Working Paper,
ISPS20-21, 2020, https://isps.yale.edu/research/publications/isps20-21. In this report, the “Business Assistance and
Development” section highlights the federally-supported technical assistance programs that are frequently associated
with providing services to business stakeholders. The role of federal procurement in business development is also noted
in the “Business Assistance and Development” section. For more information about federal small business contracting,
see CRS Report R45576, An Overview of Small Business Contracting, by Robert Jay Dilger. For information about
federal procurement, see CRS Report RS22536, Overview of the Federal Procurement Process and Resources, by L.
Elaine Halchin.
55 GAO, “Guide for Evaluating Tax Expenditures,” GAO-13-167SP, November 29, 2012, https://www.gao.gov/assets/
660/650371.pdf. For analysis of tax expenditures and spending programs, including discretionary grant programs, see
CRS Report R44530, Spending and Tax Expenditures: Distinctions and Major Programs, by Grant A. Driessen. For
analysis of federal credit programs, see “Accounting For Federal Credit Programs” in CRS Report R44193, Federal
Credit Programs: Comparing Fair Value and the Federal Credit Reform Act (FCRA), by Raj Gnanarajah.
56 42 U.S.C. §5301 et seq.
57 In addition to grants, some programs utilize contracts and cooperative agreements to meet agency and program
objectives. For more information about federal grants, see CRS Report R42769, Federal Grants-in-Aid Administration:
A Primer, by Natalie Keegan.
58 Block grants have fewer administrative requirements than categorical grants. For more information, see CRS Report
R40486, Block Grants: Perspectives and Controversies, by Joseph V. Jaroscak, Julie M. Lawhorn, and Robert Jay
Dilger. For general information on grant resources, see CRS Report RL34012, Resources for Grantseekers, by Maria
Kreiser.
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federal administrative requirements and, in some instances, performance metrics to ensure that
the funds are used in ways that meet federal objectives.
Examples of economic development grant programs include
U.S. Department of Agriculture (USDA) Rural Development programs
USDA Rural Development administers several categorical grant programs to
support the construction or renovation of community infrastructure and facilities;
broadband planning and development; business development, credit, and
assistance; and other activities in rural communities.59
Public Works and Economic Adjustment Assistance (PWEAA) programs,
administered by the DOC, Economic Development Administration
The PWEAA programs are categorical grants awarded on a competitive basis to
support both construction and non-construction projects for economically
distressed communities.60 Congress may approve supplemental appropriations for
the Economic Adjustment Assistance and other programs to address disasters,
pandemics, and specific regional issues or conditions.61 PWEAA grants serve
urban and rural communities.
Community Development Block Grant (CDBG) program, administered by the
Department of Housing and Urban Development (HUD)
CDBG is a formula-based program. CDBG provides grants for a broad range of
community and economic development activities including housing, public
facilities, infrastructure, and projects to expand economic opportunities. The
CDBG program serves urban and rural communities.62
Programs administered by federal regional commissions and authorities
Federal regional commissions and authorities work with states and other partners
to administer grants for economically distressed areas in congressionally
determined regions.63
Credit Assistance Programs
The goal of many economic development credit assistance programs is to address private market
capital gaps.64 For economic development, finance experts categorize federal credit programs as
59 For more information, see USDA Rural Development Summary of Major Programs, https://www.rd.usda.gov/files/
RD_ProgramMatrix.pdf.
60 Economic distress is determined by the area’s unemployment rate, per capita income, or a special need. 42 U.S.C.
§3161.
61 EDA, “2020 Disaster Assistance Brochure: Leading Economic Recovery in Disaster-Impacted Communities,”
at https://www.eda.gov/files/programs/disaster-recovery/EDA-Disaster-Brochure.pdf.
62 Most rural communities are considered nonentitlement communities and do not receive funds directly from HUD.
Instead, most rural communities apply for funding through state-administered CDBG programs. For more information
about the CDBG and its formula allocation, see CRS Report R43520, Community Development Block Grants and
Related Programs: A Primer, by Joseph V. Jaroscak.
63 The Appalachian Regional Commission, the Denali Commission, the Delta Regional Authority, and the Northern
Border Regional Commission are the active federal regional commissions. Additionally, in December 2021, the U.S.
Senate confirmed the first federal co-chair for the Southeast Crescent Regional Commission (SCRC) but it has yet to
convene its members or engage in economic development activities in its service area. For more information about
regional commissions, see Table 2 and see CRS Report R45997, Federal Regional Commissions and Authorities:
Structural Features and Function, by Julie M. Lawhorn.
64 Karl F. Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), p. 7.
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follows: (1) capital to businesses; (2) capital for development finance institutions; (3) project
finance; and (4) technical assistance and support activities.65 Credit programs may be designed to
lend directly to the ultimate recipients (e.g., units of local government, businesses) or they may be
designed to pass capital through intermediary organizations or financial institutions (e.g., regional
development organizations (RDOs), community development corporations (CDCs), community
development financial institutions (CDFIs)).
Federal credit assistance programs expand access to capital through federal loan guarantee and
direct loan programs. Loan guarantees may be defined as “a loan or security on which the federal
government has removed or reduced a lender’s risk by pledging to repay principal and interest in
case of default by the borrower.”66 Loan guarantees may be used in a range of federal policy
settings.67 A direct loan is “a disbursement of funds by the government to a nonfederal borrower
under a contract that requires the repayment of such funds with or without interest.”68 Federal
loan programs for economic development may have below-market, zero, or other interest rate
requirements. Some federal loan programs may be designed to provide partial principal
forgiveness.
Examples of federal credit assistance programs include69
The Small Business Administration (SBA) programs provide loans and loan
guarantees through private lenders to assist small businesses that are otherwise
unable to access credit on reasonable terms. These programs are designed to
promote competition in private markets.70
HUD’s Section 108 loan guarantee program allows local and state governments
to leverage their CDBG allocation as a loan guarantee for large-scale
development projects.71
The USDA administers direct loans and federal loan guarantees for both public
and private sector borrowers located in rural areas.
The Department of Treasury’s Community Development Financial Institutions
(CDFI) Fund administers several programs designed to expand credit to
65 Karl F. Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), p. 320.
66 The source for the definition of loan guarantees is the Congressional Budget Office, “Loan Guarantees: Current
Concerns and Alternatives for Control,” August 1978, as noted in CRS Report R42152, Loan Guarantees for Clean
Energy Technologies: Goals, Concerns, and Policy Options, by Phillip Brown.
67 For additional information, see “Background and History of Federal Loan Guarantees” in CRS Report R42152, Loan
Guarantees for Clean Energy Technologies: Goals, Concerns, and Policy Options, by Phillip Brown. For a discussion
of guarantee types, advantages and disadvantages of loan guarantees, and other economic development considerations,
see Karl F. Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), pp. 162-168.
68 2 U.S.C. §661a(1). As defined in CRS Report R44193, Federal Credit Programs: Comparing Fair Value and the
Federal Credit Reform Act (FCRA), by Raj Gnanarajah.
69 This is not intended to be a comprehensive list of federal credit assistance programs. See Table 5 and Table A-1 for
additional examples. Additional agencies administer credit assistance programs that support economic development
objectives.
70 For more information, see CRS Report RL33243, Small Business Administration: A Primer on Programs and
Funding, by Robert Jay Dilger and Sean Lowry. SBA’s “lender match” tool can help businesses find potential lenders
for loan programs (https://www.sba.gov/funding-programs/loans/lender-match).
71 For more information, see HUD Exchange, “Section 108 Loan Guarantee Program,” https://www.hudexchange.info/
programs/section-108/.
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development finance institutions, which then provide credit and other services to
underserved individuals and communities.72
EDA, USDA, HUD, ARC, and other agencies make grants to entities that
administer revolving loan funds (RLFs) to provide credit assistance in
underserved markets.73
Incentives Through Tax Policies
Tax policies (e.g., exemptions, preferential rates, credits) are a form of financial incentives that
can be designed to facilitate economic development objectives.74 Section 3(3) of the
Congressional Budget and Impoundment Control Act of 1974 specifically defines tax
expenditures as:
those revenue losses attributable to provisions of the Federal tax laws which allow a special
exclusion, exemption, or deduction from gross income or which provide a special credit, a
preferential rate of tax, or a deferral of tax liability. 75
In addition to policies that incentivize investment in specific geographic areas, the federal
government supports tax policies that may indirectly incentivize economic development through
research and development (R&D) and innovation initiatives.
Examples of federal tax policies that are intended to encourage capital investment in low-income
or distressed communities include76
New Markets Tax Credit program. The Treasury’s Community Development
Financial Institutions Fund certifies entities and designates areas for the New
Markets Tax Credit program.
Opportunity Zone program. The CDFI Fund also certifies areas (nominated by
state governors) that are eligible for Opportunity Zone tax incentives.
72 Karl F. Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), p. 420. For more
information, see CRS Report R42770, Community Development Financial Institutions (CDFI) Fund: Programs and
Policy Issues, by Sean Lowry.
73 For more information, see CRS In Focus IF11449, Economic Development Revolving Loan Funds (ED-RLFs), by
Julie M. Lawhorn.
74 Additional examples of incentives include workforce training and infrastructure improvements for businesses. The
International Economic Development Council (IEDC) defines incentives as financial or non-financial tools that
influence business decisions about where new investment will take place. See International Economic Development
Council (IEDC), Economic Development Reference Guide, p. 28, http://www.iedconline.org/clientuploads/Downloads/
IEDC_ED_Reference_Guide.pdf.
75 31 U.S.C. §1302. For analysis of tax expenditures and spending programs, including discretionary grant programs,
see CRS Report R44530, Spending and Tax Expenditures: Distinctions and Major Programs, by Grant A. Driessen.
76 This is not intended to be a comprehensive list of incentives provided through federal tax policy. See Table 5 for
additional examples. For more information, see CRS Report RL34402, New Markets Tax Credit: An Introduction, by
Donald J. Marples and Sean Lowry; and CRS Report R45152, Tax Incentives for Opportunity Zones, by Sean Lowry
and Donald J. Marples.
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Common Strategies Supported by Federal Economic
Development Programs
Infrastructure, workforce development, and business assistance activities are frequent
components of many state and local economic development plans. They also constitute distinct
policy domains of their own, and are supported by separate federal programs. The partnerships,
finance mechanisms, and implementation strategies associated with these activities may overlap.
Although the programs and objectives may vary, the administration of the different activities may
be overseen by the same federal, state, or local agency.77 The following sections highlight basic
connections between economic development and infrastructure, workforce development, and
business assistance activities. Other policy tools also frequently overlap with economic
development objectives, but are beyond the scope of this report.
Infrastructure
State and local stakeholders frequently include infrastructure and revitalization efforts in
strategies designed to achieve both short-term and long-term development goals. Federal
economic development policies have historically supported these efforts through programmatic
assistance for public utilities (e.g., electricity, telecommunications, drinking water, and
wastewater), water resources management infrastructure, and transportation, freight, and transit
projects.78
Congress continues to support infrastructure activities in economic development policies.
Funding for infrastructure activities is primarily authorized through programs administered by the
DOT, EPA, EDA, HUD, USDA, and federal regional commissions, among others. Although some
of the federally-funded infrastructure programs provided by these agencies may be designed to
support economic development outcomes, many programs administered by other federal
agencies, such as EPA, are designed to meet other distinct policy goals, such as environmental
remediation or health and human safety outcomes. In addition to grants, other common tools to
finance public infrastructure investments include bonds, loans, tax credits, and private-public
partnerships (among other policies). Additionally some federal agencies such as the U.S. Army
Corps of Engineers (USACE) and the Department of the Interior Bureau of Reclamation are
responsible for projects involving federally owned infrastructure, which may impact state and
local economic development. For instance, the USACE assists with federal harbor maintenance
involving ports and other waterways, planning and constructing new navigation channels, and
other roles.79
77 State and local governments often administer and/or implement programs. Other stakeholders may include regional
development organizations (RDOs), community development corporations (CDCs), community development financial
institutions (CDFIs) or other financial institutions, educational institutions, or nonprofit or for-profit organizations with
economic development missions, among others.
78 For more information about the current federal role in infrastructure investment, see CRS In Focus IF10592,
Infrastructure Investment and the Federal Government, by William J. Mallett.
79 State and local stakeholders plan and implement most land-side (or on land) port infrastructure activities. Land-side
port infrastructure includes terminals, docking areas, power supplies, storage, and rail depots and other
infrastructure. Federal agencies maintain and construct water-side (or in the water) port infrastructure, which involves
activities to maintain and improve harbor channels, dams, coastal waterways, and inland waterways (e.g., dredging and
dam and lock repair).
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Table A-1 in the Appendix provides a summary of selected federal programs that support more
general economic development, including infrastructure and revitalization activities.
Workforce Development
Workforce development programs provide a combination of education and training services to
prepare individuals for work and help them improve their prospects in the labor market. In the
broadest sense, workforce development efforts include secondary and postsecondary education,
on-the-job and employer-provided training, and the publicly funded system of job training and
employment services.80 By leveraging federal and other resources, state and local stakeholders
implement individual, organization, and community strategies and coordinate training and
resources across both public and private sectors.
The Workforce Innovation and Opportunity Act (WIOA; P.L. 113-128) is the primary federal
workforce development law and includes provisions for individual, organization, and community
levels of policy implementation. WIOA supports a decentralized system of programs in which
federal workforce development funding is administered by state and local stakeholders.
Programming decisions related to training and coordination are made locally. Workforce
Development Boards and American Job Centers/One-Stop Centers are the governance and
delivery entities for WIOA-funded programs, which offer classes, workshops, and assistance with
job searches in cooperation with units of government, organizations, and businesses. WIOA
support for individuals includes job and training services for adults, dislocated workers, and
youth.81 WIOA provides the foundation of the core federal workforce development strategy. Other
federal agencies may administer employment and training programs for specialized aspects of
specific industries or communities, but are generally not considered components of the core
federal framework for workforce development.82
See Table 4 for a summary of federal programs associated with state and local workforce
development strategies.
80 The definition of workforce development is based on CRS Report R44252, The Workforce Innovation and
Opportunity Act and the One-Stop Delivery System, by David H. Bradley.
81 U.S. Department of Labor, “About—Workforce Innovation and Opportunity Act (WIOA),” https://www.dol.gov/
agencies/eta/wioa/about.
82 The EDA, the Department of Education, EPA, HUD, HHS, DOL, the Department of the Interior, the Department of
Justice, SBA, the Social Security Administration, USDA, the Department of Veterans’ Affairs, and other agencies
administer other employment and training, vocational rehabilitation, postsecondary career and technical education
(CTE), and related programs for specific populations, industries, and initiatives. The active federal regional
commissions and authorities provide financial and technical assistance to support workforce development. See Table 2.
For a list of federal employment and training programs, by agency in FY2017, see GAO, “Employment and Training
Programs: Department of Labor Should Assess Efforts to Coordinate Services Across Programs,” GAO-19-200, March
28, 2019, p.11, https://www.gao.gov/products/GAO-19-200.
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Table 4. Selected Programs for Workforce Development
Grant Programs (CFDA No.)
Department of Labor (DOL) Employment and Training Administration (ETA) and the Department of Education
jointly administer and coordinate WIOA and other programs in cooperation with other federal agencies. WIOA,
Title I (Workforce Development Activities) programs include
State formula grants for employment and training activities for youth (17.259), adults (17.258), and the
National Dislocated Worker Grants—Employment Recovery (17.277) programs
National Dislocated Worker Grants (17.278)
Programs for specific populations, such as Job Corps (17.287); YouthBuild (17.274); Native American
Employment and Training (17.265); National Farmworker Jobs Program (17.264); among others
Additional employment and training programs and services administered by ETA include Community Service
Employment for Older Americans (17.235), the Employment Service (17.207), Trade Adjustment Assistance
(TAA) for Workers (17.245), among others
The federal funding coordinated through the WIOA framework is outlined in CRS Report R44252, The Workforce
Innovation and Opportunity Act and the One-Stop Delivery System, by David H. Bradley.
The EDA, the Department of Education, EPA, HUD, HHS, DOL, the Department of the Interior, the Department
of Justice, SBA, the Social Security Administration, USDA, the Department of Veterans’ Affairs, and other agencies
administer other employment and training, vocational rehabilitation, postsecondary career and technical education
(CTE), and related programs for specific populations, industries, and initiatives.
The active federal regional commissions and authorities provide financial and technical assistance to support
workforce development. See Table 2.
Sources: Department of Labor, Employment and Training Administration (https://www.dol.gov/agencies/eta);
and CRS Report R44252, The Workforce Innovation and Opportunity Act and the One-Stop Delivery System, by David
H. Bradley.
Notes: Workforce development programs include the employment and training programs authorized by Title I
of the Workforce Innovation and Opportunity Act (WIOA; P.L. 113-128), the primary federal workforce
development law. Title I authorizes many of WIOA’s workforce development activities through the Adult,
Dislocated Worker, and Youth programs administered by DOL. Congress authorized Titles II-IV of WIOA to
address adult education, the Employment Service, and vocational rehabilitation, which are not listed here.
CFDA No. refers to the Catalog of Federal Domestic Assistance, a searchable database of federal domestic
assistance programs. Each program is identified by name and a five-digit number (https://beta.sam.gov).
Business Assistance and Development
Businesses are generally viewed as a significant generator of economic activity.83 Business
assistance and development strategies involve capital access programs; technical, export, and
networking assistance initiatives; federal procurement regulations; and tax policies. These
initiatives seek to improve conditions for business formation, retention, or expansion in a defined
region or to improve the competitiveness of individual firms or sectors. With some exceptions,
federal economic development programs generally do not provide direct financial assistance to
for-profit businesses for start-up, operational, or debt expenses.84 Instead, many agencies assist
83 Karl F. Seidman, Economic Development Finance (Thousand Oaks, CA: Sage Publications, 2005), p. 6. For more
information about the U.S. Economy, see CRS In Focus IF10408, Introduction to U.S. Economy: GDP and Economic
Growth, by Mark P. Keightley and Lida R. Weinstock; and CRS In Focus IF11020, Introduction to U.S. Economy:
Business Investment, by Marc Labonte.
84 Grants.gov Community Blog, “Exploring Eligibility: Can Small Businesses Receive Federal Grants?” Community
Blog, July 7, 2016, https://grantsgovprod.wordpress.com/2016/07/07/exploring-eligibility-can-small-businessesreceive-federal-grants. According to the SBA, exceptions may include grants to businesses for export and research and
development activities. See SBA, “Grants,” https://www.sba.gov/funding-programs/grants. Exceptions may also
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businesses through programs and services tailored to state and local market or industry
conditions.85 Examples of federal programs and policies for business assistance and development
include
Capital access programs. Programs that seek to address business capital needs
include the Department of Treasury’s Community Development Financial
Institutions Fund;86 USDA, Appalachian Regional Commission (ARC) and EDA
funding for targeted revolving loan fund (RLF) programs; and SBA and USDA
loan and loan guarantee programs.
Technical assistance programs. Many programs also offer technical assistance
to businesses, including
DOC Manufacturing Extension Partnerships (MEPs) program;87
DOC Minority Business Development Agency (MBDA);88
EDA’s Trade Adjustment Assistance for Firms (TAAF);89
EDA’s Economic Adjustment Assistance, University Centers, and Build to
Scale programs;90
USDA business assistance programs; and
Small Business Administration’s Small Business Development Centers
(SBDCs), Women Business Centers (WBCs), SCORE, and other SBA small
business management and technical assistance programs.91
Export assistance and foreign direct investment assistance programs. Export
assistance and foreign direct investment assistance programs include DOC
include select USDA programs, among others. As noted, businesses may receive technical assistance, loans, and other
forms of assistance other than grants.
85 Timothy Bartik, “Jobs, Productivity, and Local Economic Development: What Implications Does Economic
Research Have for the Role of Government?” p. 848, http://www.jstor.org/stable/41789113.
86 The CDFI Fund’s programs do not provide assistance directly to businesses. The CDFI Fund provides financial and
technical assistance to support the CDFIs that are engaged in efforts to promote economic and community development
in low-income and distressed communities. For more information, see CRS Report R42770, Community Development
Financial Institutions (CDFI) Fund: Programs and Policy Issues, by Sean Lowry.
87 For more information, see CRS Report R44308, The Hollings Manufacturing Extension Partnership Program, by
John F. Sargent Jr.
88 For more information, see CRS Report R45015, Minority Business Development Agency: An Overview of Its History
and Current Issues, by Julie M. Lawhorn.
89 For more information, see CRS Report RS20210, Trade Adjustment Assistance for Firms, by Rachel F. Fefer.
90 Programs designed to build on aspects of agglomeration economies often use network and cluster-based strategies.
Since the 1990s and the publication of Michael Porter’s book, The Competitive Advantage of Nations (1989), several
federal agencies have supported regional efforts to develop and expand industry clusters. Clusters are often defined as
geographic concentrations of interconnected companies and institutions located in a specific area that may both
cooperate and compete. The connections and/or proximity of the clusters are considered advantageous for companies if
they leverage workforce, human capital, supply chain, and other spillovers. For more information, see Michael E.
Porter, “Clusters and the New Economics of Competition,” Harvard Business Review, vol. 76, no. 6 (November
December 1998), pp. 77-90, https://hbr.org/1998/11/clusters-and-the-new-economics-of-competition; and Ryan
Donahue, Joseph Parilla, and Brad McDearman, “Rethinking Industry Clusters,” The Brookings Institution, July 25,
2018, https://www.brookings.edu/research/rethinking-cluster-initiatives.
91 For more information, see CRS Report R41352, Small Business Management and Technical Assistance Training
Programs, by Robert Jay Dilger.
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International Trade Administration programs, such as the SelectUSA program92
and select USDA programs.
Federal procurement policies. Additionally, some federal procurement
regulations seek to enhance small business contracting opportunities, specifically
for “small businesses, Historically Underutilized Business Zones (HUBZones)
small businesses, women-owned small businesses (WOSBs), and service
disabled veteran-owned small businesses (SDVOSBs).”93
Tax policies. As aforementioned, incentive programs may attract investment to
targeted areas or projects through tax policies, such as the Opportunity Zones and
the New Markets Tax Credit programs.94 See “Credit Assistance Programs.”
Entrepreneurship and Innovation
In recent decades, state and local stakeholders have expanded initiatives to promote innovation
and entrepreneurship. These initiatives are frequently developed in response to concerns about
increased global competition and a growing interest in the economic development potential of
small- and medium-sized enterprises.95 These initiatives are further distinguished from longstanding industrial attraction-based strategies.96
Entrepreneurship, in the context of economic development, focuses on developing and fostering
new businesses.97 Select federal programs may assist public and private sector stakeholders in
developing the skills, services, and business climate to support entrepreneurial growth. Several of
the MBDA, Treasury/CDFI, and SBA programs noted above and in Table 5 include businesslevel technical and financial support for individual entrepreneurs. Programs administered by the
EDA, USDA Rural Development, and other DOC agencies fund programs for intermediaries that
foster entrepreneurship and innovation at the community or institution levels.98
In the context of economic development, innovation involves the “development and adoption of
new products, processes, and business models.”99 Innovation-focused efforts to foster business
92 For more information, see CRS In Focus IF10674, SelectUSA Program: U.S. Inbound Investment Promotion, by
Shayerah I. Akhtar.
93 For more information about federal procurement practices, see CRS Report R45576, An Overview of Small Business
Contracting, by Robert Jay Dilger.
94 For more information, see CRS Report RL34402, New Markets Tax Credit: An Introduction, by Donald J. Marples
and Sean Lowry; and CRS Report R45152, Tax Incentives for Opportunity Zones, by Sean Lowry and Donald J.
Marples.
95 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (University of Wisconsin Press, Madison, WI: 1988),
pp. 234-239; and Steven G. Koven and Thomas S. Lyons, Economic Development: Strategies for State and Local
Practice (Washington, DC: International City/County Management Association Press, 2010), p. 263.
96 Peter K. Eisinger, The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the
United States, Robert M. La Follette Institute of Public Affairs (Madison, WI: University of Wisconsin Press, 1988),
pp. 9-12, 76, 124-125, 227-229; and Nancy Green Leigh and Edward J. Blakely, Planning Local Economic
Development: Theory and Practice (Thousand Oaks, CA: Sage, 2017), p. 99.
97 Nancy Green Leigh and Edward J. Blakely, Planning Local Economic Development: Theory and Practice (Thousand
Oaks, CA: Sage, 2017), pp. 60-61.
98 USDA Rural Development, “Business Programs,” https://www.rd.usda.gov/programs-services/all-programs/
business-programs; Department of Commerce, “Bureaus and Offices,” https://www.commerce.gov/bureaus-andoffices; and EDA, “About OIE,” https://www.eda.gov/oie.
99 Nancy Green Leigh and Edward J. Blakely, Planning Local Economic Development: Theory and Practice (Thousand
Oaks, CA: Sage, 2017), p. 9.
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growth and investment generally target technology- and knowledge-based industries,100 and may
include technology transfer, business incubation, targeted technical assistance, and capital access
initiatives, among others. Federal programs include the DOC National Institute of Standards and
Technology (NIST), Manufacturing Extension Partnerships (MEPs) program;101 Manufacturing
USA; the Small Business Innovation Research (SBIR) and Small Business Technology Transfer
(STTR) programs;102 and others.
Science- and Technology-Based Economic Development
Federal, state, and local efforts to support research and development (R&D) may also facilitate
economic development. Congress may seek to advance the interests of the national economy
through investment in R&D,103 metrology, standards activities, technology transfer,
commercialization,104 industrial competitiveness, and related initiatives through R&D or other
business assistance programs, including programs that involve university and public private
partnerships.105 Programs at the Departments of Defense, Commerce, Energy, Health and Human
Services, and Transportation, and other agencies fund R&D and other activities designed to spur
innovation, train the workforce, or attract technology-related or targeted industry investments.106
Additionally, the National Science Foundation’s (NSF’s) Established Program to Stimulate
Competitive Research (EPSCoR) program administers grants to help enhance research
competitiveness and impact economic development in select states through improvements to the
scientific infrastructure, research capabilities, and education and training capacities of their
institutions. DOD, DOE, NASA, the National Institutes of Health (NIH), and USDA administer
programs similar to the NSF EPSCoR program.107
100 See Darrel M. West, “Technology and the Innovation Economy,” The Brookings Institution, October 19, 2011,
https://www.brookings.edu/research/technology-and-the-innovation-economy; and Nancy Green Leigh and Edward J.
Blakely, Planning Local Economic Development: Theory and Practice (Thousand Oaks, CA: Sage, 2017), p. 61.
101 For more information, see CRS Report R44308, The Hollings Manufacturing Extension Partnership Program, by
John F. Sargent Jr.
102 For more information, see CRS Report R43695, Small Business Research Programs: SBIR and STTR, by Marcy E.
Gallo.
103 For more information, see CRS Report R46341, Federal Research and Development (R&D) Funding: FY2021,
coordinated by John F. Sargent Jr.
104 David B. Audretsch et al., “The Economics of Science and Technology,” The Journal of Technology Transfer,
vol. 27, no. 2 (2002), pp. 155-203. Commercialization is defined by the Small Business Innovation Research (SBIR)
and Small Business Technology Transfer (STTR) Statute (15 U.S.C. §638) as “(A) the process of developing products,
processes, technologies, or services; and (B) the production and delivery (whether by the originating party or by others)
of products, processes, technologies, or services for sale to or use by the Federal Government or commercial markets.”
According to a report by the Congressional Budget Office (CBO), “broadly speaking, an innovation is a new or
significantly improved product or process.” See CBO, Federal Policies and Innovation, November 2014, p. 5,
https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/reports/49487-Innovation.pdf.
105 David B. Audretsch et al., “The Economics of Science and Technology,” The Journal of Technology Transfer,
vol. 27, no. 2, (2002), pp. 155-203.
106 For more information, see CRS Report R42688, Science, Technology, and Innovation Policy: CRS Experts, by John
F. Sargent Jr.
107 For more information, see CRS Report R44689, Established Program to Stimulate Competitive Research
(EPSCoR): Background and Selected Issues, by Laurie A. Harris; and https://www.nsf.gov/od/oia/programs/epscor/
index.jsp.
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Table 5. Selected Programs for Business Development, Including Entrepreneurship
Assistance, Export Assistance, and Access to Capital Activities
Grant Programs (CFDA No.)
Department of Agriculture, Rural Development programs
Business programs, such as the Rural Business Development Grant (10.351), Rural Cooperative Development
Grant (10.771), Value-Added Producer Grants (10.352), and others
Energy programs, such as the Rural Energy for America Program (REAP) (10.868) and others
Other programs. For information about USDA Rural Development’s “Programs and Services,” see the
agency’s directory of financial assistance programs for rural applications at https://www.rd.usda.gov/programsservices.
For more information, see CRS Report RL31837, An Overview of USDA Rural Development Programs, by Tadlock
Cowan.
Department of Commerce, Economic Development Administration
Build to Scale (BTS)/Regional Innovation Strategies (11.020)
Local Technical Assistance (11.303)
Partnership Planning (11.302)
Public Works and Economic Adjustment Assistance (11.300 and 11.307)
SPRINT Challenge (11.307)
Science, Technology, Engineering, and Mathematics (STEM) Talent Challenge Program (11.023)
University Centers (11.303)
For more information, see CRS Report R46991, Economic Development Administration: An Overview of Programs and
Appropriations (FY2011-FY2021), by Julie M. Lawhorn.
Department of the Interior, Bureau of Indian Affairs
Division of Energy and Mineral Development, Energy and Mineral Development Program (EMDP) (15.038)
Division of Energy and Mineral Development, Tribal Energy Development Capacity (TEDC) Program (15.148)
Native American Business Development Institute (NABDI) Grant (15.133)
Department of the Treasury
Community Financial Development Institutions (CDFI) Fund (21.020)
Community Financial Development Institutions (CDFI) Fund, Native Initiatives (21.012)
Other programs that support financial service providers
For more information, see CRS Report R42770, Community Development Financial Institutions (CDFI) Fund: Programs
and Policy Issues, by Sean Lowry.
Multi-agency Research and Technology Programs
Eleven federal agencies participate in the Small Business Innovation Research (SBIR) program: the
Departments of Agriculture (USDA), Commerce (DOC), Defense (DOD), Education (ED), Energy (DOE),
Health and Human Services (HHS), Homeland Security (DHS), and Transportation (DOT); the Environmental
Protection Agency (EPA); the National Aeronautics and Space Administration (NASA); and the National
Science Foundation (NSF).
Five federal agencies participate in the Small Business Technology Transfer (STTR) program: DOD, DOE,
HHS, NASA, and NSF.
For more information, see CRS Report R43695, Small Business Research Programs: SBIR and STTR, by Marcy E.
Gallo.
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National Credit Union Administration
Community Development Revolving Loan Fund grant and loan program (44.002)
For more information, see CRS Report R46360, The Credit Union System: Developments in Lending and Prudential Risk
Management, by Darryl E. Getter.
Credit Assistance Programs (CFDA No.)
Department of Agriculture, Rural Development programs address business development and business capital,
including
Business programs, such as Business and Industry Loan Guarantees (10.768), Intermediary Relending Program
(IRP) (10.767), Rural Economic Development Loans and Grants (10.854), Rural Microentrepreneur Assistance
Program (RMAP) (10.870), and others
Energy Programs, such as the Rural Energy for America Program (REAP) (10.868) and others
For more information, see CRS Report RL31837, An Overview of USDA Rural Development Programs, by Tadlock
Cowan.
Department of Commerce, Economic Development Administration
Economic Adjustment Assistance (EAA) for Revolving Loan Funds (11.307)
Multiple EDA programs noted in Table A-1 may support state and local efforts to expand access to capital
markets
For more information, see CRS In Focus IF11449, Economic Development Revolving Loan Funds (ED-RLFs), by Julie M.
Lawhorn.
Department of Interior, Bureau of Indian Affairs
Indian Loan Guarantee, Insurance and Interest Subsidy Program (15.124)
Export-Import Bank administers credit assistance programs. For more information, see CRS Report R43581,
Export-Import Bank: Overview and Reauthorization Issues, by Shayerah Ilias Akhtar.
National Credit Union Administration
Community Development Revolving Loan Fund grant and loan program (44.002)
For more information, see CRS Report R46360, The Credit Union System: Developments in Lending and Prudential Risk
Management, by Darryl E. Getter.
Small Business Administration
504 Certified Development Company Loans (59.041)
7(a) Loan Guarantees (59.012)
Microloan Program (59.046)
Small Business Investment Corporation (SBIC) program (59.011)
Veterans Outreach Program (59.044)
Women’s Business Ownership Assistance (59.043)
This is not a comprehensive list of SBA credit assistance programs. For more information on credit assistance and
other programs, see CRS Report RL33243, Small Business Administration: A Primer on Programs and Funding, by
Robert Jay Dilger.
Department of the Treasury
CDFI Bond Guarantee Program (BGP) (21.014)
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Federal Programs that Provide Technical Assistance and Other Support (CFDA No.)
Department of Agriculture programs include technical assistance programs for businesses and other business
development activities, including
Office of Partnerships and Public Engagement (OPPE), Outreach and Assistance for Socially Disadvantaged
and Veteran Farmers and Ranchers (10.443)
Rural Development, Rural Business Investment Program (RBIP)
Rural Development, Rural Cooperative Development Grants (10.771)
Rural Development, Socially-Disadvantaged Groups Grant (10.871)
Department of Commerce, Economic Development Administration (EDA) programs, including
Build to Scale (BTS)/Regional Innovation Strategies (11.020)
Economic Adjustment Assistance (11.307)
Local Technical Assistance (11.303)
Partnership Planning (11.302)
SPRINT Challenge (11.307)
Trade Adjustment Assistance for Firms (TAAF) (11.313)
University Centers (11.303)
For more information, see CRS Report RS20210, Trade Adjustment Assistance for Firms, by Rachel F. Fefer; and CRS
Report R46991, Economic Development Administration: An Overview of Programs and Appropriations (FY2011-FY2021),
by Julie M. Lawhorn.
Department of Commerce, Minority Business Development Agency (MBDA)
Minority Business Development Business Centers (11.805)
Minority Business Development Business Centers, American Indian, Alaska Native, and Native Hawaiian
projects (AIANNH) (11.804)
For more information, see CRS Report R45015, Minority Business Development Agency: An Overview of Its History and
Current Issues, by Julie M. Lawhorn.
Department of Commerce, National Institute of Standards and Technology (NIST) administers several programs
and coordinates cross-agency initiatives, including
Manufacturing USA in partnership with the Departments of Defense, Energy, and other agencies as well as
with private industry and academic institutions. For more information about Manufacturing USA, see
https://www.manufacturingusa.com/about-us.
Manufacturing Extension Partnerships (MEP) program (11.611)
For more information, see CRS Report R44308, The Hollings Manufacturing Extension Partnership Program, by John F.
Sargent Jr.; and CRS Report R44371, The National Network for Manufacturing Innovation, by John F. Sargent Jr.
Department of Commerce, International Trade Administration (ITA) programs, including
SelectUSA
For more information, see CRS In Focus IF10674, SelectUSA Program: U.S. Inbound Investment Promotion, by
Shayerah Ilias Akhtar.
Department of Defense
Defense Logistics Agency (DLA), Procurement Technical Assistance Centers (12.002)
For more information, see “The Roles of Other Procurement Officers and Offices” in CRS Report R45576, An
Overview of Small Business Contracting, by Robert Jay Dilger.
Small Business Administration (SBA)
District offices and SBA-funded Small Business Development Centers (SBDCs), Women Business Centers
(WBCs), SCORE, and other SBA small business management and technical assistance programs
For more information, see CRS Report R41352, Small Business Management and Technical Assistance Training
Programs, by Robert Jay Dilger.
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Department of the Treasury
Community Financial Development Institutions (CDFI) Fund (21.020)
For more information, see CRS Report R42770, Community Development Financial Institutions (CDFI) Fund: Programs
and Policy Issues, by Sean Lowry.
Select Incentive Programs
Department of Treasury, Opportunity Zones. For more information, see CRS Report R45152, Tax Incentives for
Opportunity Zones, by Sean Lowry and Donald J. Marples.
Department of Treasury, New Markets Tax Credits (NMTC). For more information, see CRS Report RL34402,
New Markets Tax Credit: An Introduction, by Donald J. Marples and Sean Lowry.
Department of Homeland Security, Citizenship and Immigration Services, EB-5 Immigrant Investor Visa Program.
For more information, see CRS Report R44475, EB-5 Immigrant Investor Visa, by Holly Straut-Eppsteiner.
Department of the Interior, National Park Service, Federal Historic Preservation Tax Incentive. For more
information, see CRS Report R45800, The Federal Role in Historic Preservation: An Overview, by Mark K. DeSantis.
Sources: Programs included in this table are selected from the following directories and reports: EDA’s Matrix
of Selected Federal Programs That Can Assist Economic Development Strategies (https://www.eda.gov/files/edi/FederalEconomic-Development-assistance-Matrix.xlsx); USDA Programs and Services (https://www.rd.usda.gov/
programs-services) and Business Programs (https://www.rd.usda.gov/programs-services/all-programs/businessprograms); the Department of Interior Bureau of Indian Affairs (https://www.bia.gov/as-ia/ieed); and the
Department of Defense Office of Local Defense Community Cooperation (OLDCC) (formerly the Office of
Economic Adjustment) (https://www.oea.gov/program-overview).
Notes: In addition to the programs in Table A-1 and Table 4, state and local stakeholders can access the
programs in Table 5 to support business development and business assistance strategies, including
entrepreneurship assistance, export assistance, and access to capital activities. The programs may support
strategies to address credit, market, training, or other barriers. However, this table is not intended to be
comprehensive. It excludes most community development, housing, and education programs. Agencies other
than those identified may provide assistance that results in economic development outcomes, but are designed
to meet other distinct policy goals. For example, in addition to Rural Development other USDA agencies such as
the Agricultural Marketing Service, Farm Services Agency, Foreign Agricultural Service, Forest Service, and the
Natural Resources Conservation Service administer programs that support landowners, businesses, and
agricultural trade, producers, and processors. These programs may include economic development as a related
goal or activity; however, it is not the primary function of the program. For information about USDA Rural
Development’s “Programs and Services,” see the agency’s directory of financial assistance programs for rural
applications (https://www.rd.usda.gov/programs-services) and business programs (https://www.rd.usda.gov/
programs-services/all-programs/business-programs). Additionally, SelectUSA’s online directory also provides a
searchable database of federal business programs and incentives (https://www.selectusa.gov/programs-andincentives). The active federal regional commissions and authorities also provide financial and technical assistance
to support economic development strategies in their congressionally-designated regions (see Table 2).
CFDA No. refers to the Catalog of Federal Domestic Assistance, a searchable database of federal domestic
assistance programs. Each program is identified by name and a five-digit number (https://beta.sam.gov).
a. Agencies may use multiple CFDA numbers for SBIR and STTR programs.
Policy Considerations
The federal role in economic development policy has evolved and diversified over time to meet
changing economic circumstances. Multiple policies—administered by many agencies, programs,
and partners across sectors—comprise the generally decentralized federal approach to current
economic development policy.108 Congressional interest in federal economic development policy
frequently focuses on promoting economic growth and job creation. Focusing economic
development on outcomes solely related to economic growth remains a matter of ongoing
108 Nancy Green Leigh and Edward J. Blakely, Planning Local Economic Development: Theory and Practice
(Thousand Oaks, CA: Sage, 2017), p. 36.
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research and policy consideration. In addition to facilitating growth, economic development
policies may be designed to reduce regional disparities or socioeconomic inequality. Policies may
also be designed to improve outcomes related to community conditions, amenities, or services
that may contribute to economic growth outcomes. Such policies may integrate outcomes related
to community development, equity, wealth creation, human capital development, environmental
sustainability, job types, job quality, and others.109
The federal role in economic development also remains a topic of perennial policy debate.110
Some have advocated for a greater emphasis on economic development policies that actively
support and incentivize the private market while others advocate for less emphasis on federal
involvement, arguing that government-led economic development programs are either
unnecessary or distort the dynamics of the private market. They favor fewer federal spending
programs or limited interventions for economic development. Proponents of limited federal
assistance for state and local programs also argue that federal economic development programs
are duplicative, have primarily local (as opposed to national) impacts, have overlapping
objectives, lack effective federal coordination, and often do not have valid and reliable
performance metrics.111
Proponents of continued federal assistance for state and local programs suggest a government role
may be warranted for the purposes of building capacity, especially when the private market may
be unable or unwilling to advance economic development activities.112 Still others view the role
of federal assistance primarily as a complement to private resources or a catalyst for private
investment.113 Proponents of expanded federal assistance have called for updating existing
programs or creating new economic development initiatives that foster human capital, resiliency,
entrepreneurship, innovation, technology, and connectivity. Some practitioners and researchers
109 Maryann Feldman and Nichola Lowe, “Evidence-Based Economic Development Policy,” Innovations: Technology,
https://www.mitpressjournals.org/doi/pdf/10.1162/inov_a_00255.
110 Maryann Feldman et al., “The Logic of Economic Development: A Definition and Model for
Investment,” Environment and Planning C: Government and Policy, vol. 34, no. 1 (2016). Also available at
https://www.eda.gov/files/tools/research-reports/investment-definition-model.pdf.
111 For a discussion of theories of economic development, including the government role, see Steven G. Koven and
Thomas S. Lyons, Economic Development: Strategies for State and Local Practice (Washington, DC: International
City/County Management Association Press, 2010), pp. 29-51; Steven C. Deller and Stephan J. Goetz, “Historical
Description of Economic Development Policy,” pp. 24-32; and Peter K. Eisinger, The Rise of the Entrepreneurial
State: State and Local Economic Development Policy in the United States, Robert M. La Follette Institute of Public
Affairs (Madison, WI: University of Wisconsin Press, 1988), pp. 85-127. For a discussion of market efficiency and the
government role in economic efficiency, see CRS Report RL32162, The Size and Role of Government: Economic
Issues, by Marc Labonte.
112 Maryann Feldman et al., “The Logic of Economic Development: A Definition and Model for Investment,”
Environment and Planning C: Government and Policy, vol. 34, no. 1 (2016), pp. 5-21 (also available at
https://www.eda.gov/files/tools/research-reports/investment-definition-model.pdf); Nancy Green Leigh and Edward J.
Blakely, Planning Local Economic Development: Theory and Practice (Thousand Oaks, CA: Sage, 2017), pp. 455482; Steven C. Deller and Stephan J. Goetz, “Historical Description of Economic Development Policy,” p. 32; Steven
G. Koven and Thomas S. Lyons, Economic Development: Strategies for State and Local Practice (Washington, DC:
International City/County Management Association Press, 2010), pp. 29-37; and Timothy Bartik, “What Should the
Federal Government Be Doing About Urban Economic Development?” Cityscape, vol. 1, no. 1 (1994).
113 Peter Bassine et al., Big Ideas for Small Businesses, Yale Institution for Social and Policy Studies Working Paper,
ISPS20-21, 2020, https://isps.yale.edu/research/publications/isps20-21; and Nichola Lowe and Maryann P. Feldman,
“Breaking the Waves: Innovating at the Intersections of Economic Development,” Economic Development Quarterly,
vol. 32, no. 3, (August 2018), p. 4.
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call for revised or new policy approaches due to shifts in employment sectors, demographic
changes, and advances in technology.114
Consideration of whether economic development programs should target assistance to specific
beneficiaries, how, and who the beneficiaries should be continue to shape the development of
federal policy today. Some advocate for targeting socially disadvantaged and economically
distressed areas, some advocate for policies that address rural and urban economic development
initiatives separately, while others suggest that assistance should be distributed regardless of
socioeconomic conditions or to individuals directly (as opposed to places).115 Several GAO
reports on federal economic development programs have evaluated how economic adjustment
assistance, small business assistance, and entrepreneurial assistance programs may coordinate
with, duplicate, overlap, or complement each other.116 Others have examined the accessibility,
impact, and distribution of existing programs in order to understand how federal resources are
distributed relative to levels of economic distress, population size or density, and other factors.117
Congress may want to consider factors that may affect the reach and extent of federal resources.
When macroeconomic and trade policies, major events, and economic shocks impact local, state,
and regional economies, their effects may extend beyond the influence of economic development
114 U.S. Congress, House Committee on Transportation, Subcommittee on Economic Development, Public Buildings,
and Emergency Management, hearing on Building A 21st-Century Infrastructure for America: Economic Development
Stakeholders’ Perspectives, 115th Cong., 1st sess., September 13, 2017 (Washington, DC: GPO, 2018),
https://www.govinfo.gov/committee/house-transportation?path=/browsecommittee/chamber/house/committee/
transportation/collection/CHRG/congress/115.
For additional analysis, see Timothy Bartik, “Bringing Jobs to People: Improving Local Economic Development
Policies,” Upjohn Institute Working Paper No. 2020-023 (Kalamazoo, MI: W.E. Upjohn Institute for Employment
Research), 2020; Timothy J. Bartik, “What Should the Federal Government Be Doing About Urban Economic
Development?” Upjohn Institute Working Paper No. 94-25 (Kalamazoo, MI: W.E. Upjohn Institute for Employment
Research), 1994; and Ann Markusen and Amy Glasmeier, “Overhauling and Revitalizing Federal Economic
Development Programs,” Economic Development Quarterly, vol. 22, no. 2 (May 2008), pp. 83-91. For examples of
policy recommendations in favor of continued and expanded federal roles, see Zia Qureshi, “Democratizing
Innovation: Putting Technology to Work for Inclusive Growth,” The Brookings Institution, December 16, 2020,
https://www.brookings.edu/research/democratizing-innovation-putting-technology-to-work-for-inclusive-growth/; and
Local Initiatives Support Coalition (LISC), “Economic Development Priorities,” https://www.lisc.org/media/
filer_public/e1/07/e1072436-1092-4b42-8a6d-5637dba7a7d7/
102720_lisc_policy_priorities_economic_development.pdf; among others.
115 For a discussion of these perspectives and approaches, see Steven G. Koven and Thomas S. Lyons, Economic
Development: Strategies for State and Local Practice (Washington, DC: International City/County Management
Association Press, 2010), pp. 29-51; James H. Spencer, “People, Places, and Policy: A Politically Relevant Framework
for Efforts to Reduce Concentrated Poverty,” Policy Studies Journal, vol. 32, no. 4 (11, 2004), pp. 545-568; and
Edward W. Hill, “Principles for Rethinking the Federal Government’s Role in Economic Development” in Economic
Development Quarterly, (1998), p. 302, https://journals.sagepub.com/doi/pdf/10.1177/089124249801200402. For a
perspective critical of select place-based policies, see Edward L. Glaeser, “Can Buffalo Ever Come Back?” City
Journal, Autumn 2017. For a perspective supportive of relocation assistance programs, see Michael R Strain, “Pay
Workers to Leave Depressed Towns,” Bloomberg Opinion, December 23, 2019.
116 GAO, Entrepreneurial Assistance: Opportunities Exist to Improve Programs’ Collaboration, Data-Tracking, and
Performance Management, GAO-12-819, August 2012, https://www.gao.gov/products/GAO-12-819; GAO, Multiple
Employment and Training Programs, GAO-11-92, January 2011, https://www.gao.gov/assets/320/314551.pdf; and
GAO, Economic Development: Economic Development Programs (2011-09), https://www.gao.gov/duplication/
action_tracker/Economic_Development_Programs_%282011-09%29/action1#t=1.
117 For more information, see GAO, The Distribution of Federal Economic Development Grants to Communities with
High Rates of Poverty and Unemployment, GAO-12-938R, September 2012, https://www.gao.gov/assets/650/
648367.pdf; Coping with Adversity: Regional Economic Resilience and Public Policy, pp. 154-158; and Stephen
Malpezzi, “Local Economic Development and Its Finance: An Introduction,” in Financing Economic Development in
the 21st Century, Routledge (2014), p. 15.
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policies and programs. Economic development strategies generally are not fully replicable
because they are condition- and context-specific, and there is no one-size-fits-all solution or
federal program that is guaranteed to produce economic development outcomes. Because federal
economic development programs are decentralized and vary in terms of scale, eligibility,
timelines, and other terms of assistance, state and local stakeholders often apply for funding from
multiple agencies simultaneously in order to implement planning, technical assistance,
infrastructure, business development, workforce development, and revitalization strategies.118
Congress may wish to consider the extent and the forms of assistance that are designed to
facilitate a stronger national economy through investment in state and local economic
development activities. Congress may wish to consider the overall federal role as well as the
framework and mechanisms for administering assistance. For instance, there may be continued
interest in determining how the current set of programs coordinate, complement, or overlap.
There may also be continued interest in examining the efficacy and impact of the programs in
achieving their stated objectives individually and as a portfolio of programs.119 Additionally,
Congress may consider options for addressing economic disparities, assisting lagging regions,
and providing disaster assistance and economic relief to individuals and businesses adversely
affected by the COVID-19 pandemic and related economic impact through existing or new
programs.
118 Steven G. Koven and Thomas S. Lyons, Economic Development: Strategies for State and Local Practice
(Washington, DC: International City/County Management Association Press, 2010), pp. 5-11.
119 Coordination of federal economic development programs is addressed in several government reports, and was
recently discussed in the U.S. Congress, House Committee on Transportation, Subcommittee on Economic
Development, Public Buildings, and Emergency Management, hearing on Building Prosperity: EDA’s Role in
Economic Development and Recovery, 116th Cong., 1st sess., April 9, 2019 (Washington, DC: GPO, 2019).
Additionally, in 2016, the Office of Management and Budget designated EDA as the lead federal agency for integration
of federal economic development programs. EDA then established the Division of Economic Development Integration
(EDI). See also EDA, Economic Development Integration, https://www.eda.gov/edi/ and https://www.eda.gov/archives/
2016/edi/.
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Appendix. Federal Assistance for State and Local
Economic Development Activities
Table A-1. Selected Programs for General Economic Development, Including
Infrastructure and Revitalization Activities
Grant Programs (CFDA No.)
Department of Agriculture, Rural Development assistance supports water resources, wastewater, utilities,
telecommunications, community facilities, and other economic development and revitalization activities, including,
but not limited to
Rural Development (RD) Community Facilities programs
Community Facilities Loans and Grants (10.766)
Rural Community Development Initiative (RCDI) grants (10.446)
Tribal College Initiative Grants (10.222)
RD Water and Environmental programs
Emergency Community Water Assistance Grants (10.763)
Solid Waste Management Grant Program (10.762)
Water and Waste Disposal Loan and Grant Program, including grants to alleviate health risks on Tribal
lands and colonias (10.760 and 10.770)
RD Telecommunications programs
Community Connect Program (10.863)
Distance Learning and Telemedicine Grants (10.855)
ReConnect (10.752)
Rural Broadband Access Loan and Grant Program (10.886)
Additional programs support economic development activities, including grants administered through the
Cooperative Services, Electric, Energy, and other programs. For information about USDA Rural
Development’s “Programs and Services,” see the agency’s directory of financial assistance programs for rural
applications at https://www.rd.usda.gov/programs-services.
For more information, see CRS Report RL31837, An Overview of USDA Rural Development Programs, by Tadlock
Cowan. For wastewater and water supply infrastructure programs, see CRS Report R46471, Federally Supported
Projects and Programs for Wastewater, Drinking Water, and Water Supply Infrastructure, coordinated by Jonathan L.
Ramseur. For more on the ReConnect program, see CRS In Focus IF11262, USDA’s ReConnect Broadband Pilot
Program, by Alyssa R. Casey.
Department of Commerce, Economic Development Administration (EDA) programs support infrastructure and
economic development activities, including
Build to Scale (BTS)/Regional Innovation Strategies (11.020)
Local Technical Assistance (11.303)
Partnership Planning (11.302)
Public Works and Economic Adjustment Assistance (11.300 and 11.307)
SPRINT Challenge (11.307)
Science, Technology, Engineering, and Mathematics (STEM) Talent Challenge Program (11.023)
University Centers (11.303)
For more information, see CRS Report R46991, Economic Development Administration: An Overview of Programs and
Appropriations (FY2011-FY2021), by Julie M. Lawhorn.
Department of Defense
Office of Local Defense Community Cooperation (OLDCC) (formerly the Office of Economic Adjustment)
programs for base realignment and closure (BRAC) communities and other defense-related activities
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Multiple Environmental Protection Agency (EPA) programs support brownfield site assessment, remediation, and
planning, and other related activities, including
Brownfields grants
Brownfields Site Assessment, “Cleanup” (i.e., remediation), and Planning Grants (66.818)
Environmental Workforce Development and Job Training Grants (66.815)
Technical Assistance, Training, and Research Grants (66.814)
State and Tribal Response Program Grants (66.817)
For brownfield programs, see “Brownfields Properties” in CRS Report R41039, Comprehensive Environmental
Response, Compensation, and Liability Act: A Summary of Superfund Cleanup Authorities and Related Provisions of the Act,
by David M. Bearden.
Federal Communications Commission (FCC) Universal Services Fund (USF) programs support
telecommunications and broadband activities including
Connect America Fund (32.002)
Lifeline Program (32.003)
Rural Digital Opportunity Fund (RDOF) (32.002)
Rural Health Care Program (32.005)
Schools and Libraries (E-Rate) Program (32.004)
For more information, see CRS Report RL30719, Broadband Internet Access and the Digital Divide: Federal Assistance
Programs, by Colby Leigh Rachfal and Angele A. Gilroy; and CRS Report R46501, Rural Digital Opportunity Fund:
Requirements and Selected Policy Issues, by Colby Leigh Rachfal.
Department of Health and Human Services (HHS)
Administration for Children and Families, Administration for Native Americans
Social and Economic Development Strategies—Growing Organizations (93.612)
Office of Community Services (OCS) administers multiple programs, including
Community Economic Development (CED) (93.570)
Rural Community Development (RCD) (93.570)
OCS also administers the Community Services Block Grant (CSBG) program (93.569), which supports local
antipoverty agencies. For more information on CSBG, CED, and RCD, see CRS Report RL32872, Community
Services Block Grants (CSBG): Background and Funding, by Libby Perl. Indian Health Service (IHS), an agency within
HHS, administers grant programs for colleges and universities that encourage health care services to tribal
communities.
Housing and Urban Development (HUD) Community Development Block Grant (CDBG) state and entitlement
programs (14.228 and 14.218) and the Indian Community Development Block Grant (ICDBG) program (14.862).
Economic development is one of many eligible CDBG and ICDBG activities. For more information, see CRS
Report R43520, Community Development Block Grants and Related Programs: A Primer, by Joseph V. Jaroscak.
National Endowment for the Arts (NEA) programs support place-making initiatives, including
Our Town (45.024)
Department of the Interior
Office of Surface Mining, Reclamation, and Enforcement (OSMRE)
Abandoned Mine Land Reclamation Economic Development Pilot Program (AML Pilot Program) for six
selected Appalachian states and three designated tribes (Crow and Hopi Tribes and Navajo Nation). The
pilot program supplements grants from the Abandoned Mine Reclamation Fund for reclamation projects
that are prioritized based on human health, public safety, and environmental risks, but that also may
facilitate land reuse or redevelopment.
See also CRS Report R46308, Bureau of Reclamation Rural Water Projects, by Anna E. Normand; and CRS In Focus
IF10626, Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act,
by Charles V. Stern. For AML programs, see CRS Report R46266, The Abandoned Mine Reclamation Fund:
Reauthorization Issues in the 116th Congress, by Lance N. Larson.
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Department of Transportation (DOT), several DOT programs support highway, public transportation, rail, and
aviation infrastructure, including
Federal Aid Highway Program
Federal Public Transportation Program
Federal Civil Aviation Program
Amtrak Program
For a guide to these programs, see CRS Report R44332, Federal-Aid Highway Program (FAHP): In Brief, by Robert S.
Kirk; CRS Report R42706, Federal Public Transportation Program: In Brief, by William J. Mallett; CRS Report R42781,
Federal Civil Aviation Programs: In Brief, by Bart Elias and Rachel Y. Tang; CRS Report R44367, Federal Freight Policy: In
Brief, by John Frittelli; and CRS Report R44973, Amtrak: Overview, by David Randall Peterman.
Credit Assistance Programs (CFDA No.)
Department of Agriculture, Rural Development programs support water resources, wastewater, utilities,
telecommunications, community facilities, and other economic development and revitalization activities, including
Community Facilities Loans and Grants and Loan Guarantees (10.766)
Electric Infrastructure Loan and Loan Guarantees (10.850)
Telecommunications Infrastructure Loans and Guarantees (10.851)
Water and Waste Disposal Loan and Grant Program and Loan Guarantee Program (10.760 and10.770)
Additional programs support economic development activities, including loans and loan guarantees
administered through the Cooperative Services, Electric, Energy, and other programs. For information about
USDA Rural Development’s “Programs and Services,” see the agency’s directory of financial assistance
programs for rural applications at https://www.rd.usda.gov/programs-services.
For more information, see CRS Report RL31837, An Overview of USDA Rural Development Programs, by Tadlock
Cowan; and CRS Report R46471, Federally Supported Projects and Programs for Wastewater, Drinking Water, and
Water Supply Infrastructure, coordinated by Jonathan L. Ramseur.
Environmental Protection Agency (EPA) programs support drinking water and wastewater infrastructure
improvements and other activities, including
Clean Water State Revolving Fund program (66.458)
Water Infrastructure Finance and Innovation Act program (66.958)
For wastewater and water supply infrastructure programs, see CRS Report R46471, Federally Supported Projects
and Programs for Wastewater, Drinking Water, and Water Supply Infrastructure, coordinated by Jonathan L. Ramseur.
Department of Housing and Urban Development (HUD)
CDBG Section 108 Loan Guarantees (14.248) and the CDBG state and entitlement programs (14.228 and
14.218)
For more information, see CRS Report R43520, Community Development Block Grants and Related Programs: A
Primer, by Joseph V. Jaroscak.
Department of Transportation (DOT)
Transportation Infrastructure Finance and Innovation Act (TIFIA) Program (20.223)
For more information, see CRS Report R45516, The Transportation Infrastructure Finance and Innovation Act (TIFIA)
Program, by William J. Mallett.
Department of Treasury
Community Financial Development Institutions (CDFI) Fund, Capital Magnet Fund (21.011)
Community Financial Development Institutions (CDFI) Fund, Financial Assistance program (21.020)
Other programs that support financial service providers
For more information, see CRS Report R42770, Community Development Financial Institutions (CDFI) Fund: Programs
and Policy Issues, by Sean Lowry.
Sources: Programs included in this table are listed in the following directories and reports: EDA’s Matrix of
Selected Federal Programs That Can Assist Economic Development Strategies (https://www.eda.gov/files/edi/FederalEconomic-Development-assistance-Matrix.xlsx); CRS Report R46471, Federally Supported Projects and
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Programs for Wastewater, Drinking Water, and Water Supply Infrastructure, coordinated by Jonathan L.
Ramseur; USDA Programs and Services (https://www.rd.usda.gov/programs-services) and Business Programs
(https://www.rd.usda.gov/programs-services/all-programs/business-programs); the Department of Interior Bureau
of Indian Affairs (https://www.bia.gov/as-ia/ieed); and the Department of Defense Office of Local Defense
Community Cooperation (OLDCC) (formerly the Office of Economic Adjustment) (https://www.oea.gov/
program-overview).
Notes: This table is not intended to be comprehensive. The table excludes assistance designed to improve
federally-owned infrastructure and most community development, housing, and education programs. Agencies
other than those identified may provide assistance that results in economic development outcomes, but are
designed to meet other distinct policy goals. For example, in addition to Rural Development other USDA
agencies such as the Agricultural Marketing Service, Farm Services Agency, Foreign Agricultural Service, Forest
Service, and the Natural Resources Conservation Service administer programs that support landowners,
businesses, and agricultural trade, producers, and processors. These programs may include economic
development as a related goal or activity; however, it is not the primary function of the program. For information
about USDA Rural Development’s “Programs and Services,” see the agency’s directory of financial assistance
programs for rural applications (https://www.rd.usda.gov/programs-services).
The active federal regional commissions and authorities provide financial and technical assistance to support
economic development strategies, including infrastructure and other activities, in their congressionally-designated
regions (see Table 2).
CFDA No. refers to the Catalog of Federal Domestic Assistance, a searchable database of federal domestic
assistance programs. Each program is identified by name and a five-digit number (https://beta.sam.gov).
Author Information
Julie M. Lawhorn
Analyst in Economic Development Policy
Key Policy Staff
Area of Expertise
Name
Agriculture (USDA) Rural Development programs
Lisa Benson
Agriculture (USDA) Foreign Agriculture Service (export)
programs
Anita Regmi
Apprenticeships
Benjamin Collins
Broadband
Lisa Benson (USDA programs)
Patty Figliola (FCC programs)
Julie Lawhorn (EDA programs)
Colby Rachfal (FCC (RDOF), NTIA programs)
Brownfields, Superfund, Other Federal Environmental
Remediation Programs, and Abandoned Mine Land
reclamation programs
David Bearden
Lance Larson
Economic Development Administration (EDA) programs
(except Trade Adjustment Assistance for Firms)
Julie Lawhorn
Fire stations
Brian Humphreys
Federal grant administration and oversight
Natalie Keegan
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Area of Expertise
Name
Fiscal policy
Grant Driessen
Mark Keightley
Marc Labonte
Lida Weinstock
Housing policy
Margaret McCarty
HUD, Community Development Block Grant (CDBG)
and CDBG-Disaster Relief (CDBG-DR)
Joseph Jaroscak
Federal regional commissions; tribal economic
development; the Defense Production Act (DPA);
community disaster loans; climate and economic
development policies
Julie Lawhorn
Department of Health and Human Services, Office of
Community Services programs
Libby Perl
Minority Business Development Agency (MBDA)
Julie Lawhorn
Manufacturing (Manufacturing Extension Partnership
(MEP) program and Manufacturing USA)
John F. Sargent, Jr.
Poverty
Joseph Dalaker
Standards and Metrology (National Institute of Standards
and Technology (NIST))
John F. Sargent, Jr.
SelectUSA
Shayerah Ilias Akhtar
Small Business Administration and technical assistance for
small- and medium-sized businesses
Robert Dilger
Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs
Marcy Gallo
Tax policies, including New Markets Tax Credits and
Opportunity Zones programs
Sean Lowry
Donald J. Marples
Transportation, transit, infrastructure
William J. Mallett
Trade Adjustment Assistance for Firms (TAAF)
Rachel Fefer
Veterans Employment
Benjamin Collins
Wastewater Infrastructure
Lisa Benson (USDA, Rural Development programs)
Jonathan Ramseur (EPA programs)
Water—Drinking Water Infrastructure
Lisa Benson (USDA, Rural Development programs)
Elena Humphreys (EPA programs)
Water—Water Supply Infrastructure
Anna E. Normand (Department of Defense and
Department of Interior programs)
Charles V. Stern (Department of Defense and
Department of Interior programs)
Megan Stubbs (USDA, Natural Resources
Conservation Service programs)
Workforce development; the Workforce Innovation and
Opportunity Act (WIOA)
David Bradley
Benjamin Collins
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Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
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Congressional Research Service
R46683 · VERSION 9 · UPDATED
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.