The Impact of Small Regional Economic Development Commissions: Is There Any Bang After Just a Few Bucks?

Abstract

Despite substantial funding going to regional economic development programs, little is known about the benefits of some of the smaller, place-based programs. The authors extend the literature on regional commissions by analyzing the economic gains to the Delta Regional Authority (DRA). The DRA was founded in 2000 to provide enhanced development aid to 252 lower Mississippi Valley counties. Using data from 1997 to 2016, the authors assess the DRA’s impact on employment, income, migration, and poverty. One-to-one propensity score matching is used to generate counterfactual counties. Because of the endogenous nature of the treatment, the authors instrument for counties being included in the DRA using a dummy for whether the county is within the lower Mississippi watershed. The ensuing results reflect an estimation of the intent-to-treat benefits of the DRA. The authors find that the DRA is associated with income gains and decreases in unemployment; however, it has no impact on poverty or migration.