Definition of local economic development

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					                        A 28E Management Report
                                                   on
                  Managing Effective Interlocal
                 Economic Development Networks



     A 28E Management Report prepared in cooperation with the
     IowAccess Council and the Information Technology
     Enterprise, Iowa Department of Administrative Services.

                                                   By
                                    Dawn Ashbacher
                      Public Policy and Administration Program
                           Department of Political Science
                                Iowa State University



                                        July 22, 2005



This research was made possible with an award from the IowAccess Council, Iowa Department of
Administrative Services, Dr. Kurt Thurmaier and Dr. Yu-Che Chen, Principal Investigators. The
information in this report does not necessarily reflect the views or opinions of the Department of
Administrative Services or the IowAccess Council.

Appropriate Citation is: Ashbacher, Dawn. 2005. “Managing Effective Interlocal Economic Development
Networks,” A 28E Management Report prepared for the Department of Administrative Services, State of
Iowa. Ames, IA: Iowa State University.




                                                                         ED Management report7-05.doc
TABLE OF CONTENTS

INTRODUCTION .............................................................................................................. 3
UNDERSTANDING ECONOMIC DEVELOPMENT NETWORKS
......................................................................................................................................................... 3
   DEFINITION OF NETWORKS .......................................................................................................... 3
   THE NEED FOR ECONOMIC DEVELOPMENT NETWORKS IN IOWA ................................................. 4
   LEVELS OF NETWORK EFFECTIVENESS ........................................................................................ 4
   BARRIERS AND CHALLENGES TO NETWORK EFFECTIVENESS ....................................................... 5
   NETWORK MANAGEMENT ............................................................................................................ 6
   THE MANAGEMENT OF EFFECTIVE ECONOMIC DEVELOPMENT NETWORKS ................................. 8
METHODOLOGY ............................................................................................................ 9
RESULTS .............................................................................................................................. 10
   COUNTY 1—ALLIANCE OF PROFESSIONAL ED DIRECTORS ....................................................... 12
   COUNTY 2—COUNTY ED COMMISSION (EDC) WITH A LINK TO ALL CITIES IN THE COUNTY ... 13
   COUNTY 3—COUNTY ED COMMISSION (EDC) WITH REPRESENTATIVES FROM INTERESTED
   COMMUNITIES............................................................................................................................ 14
   NETWORK LEVEL EFFECTIVENESS ............................................................................................. 15
   ORGANIZATIONAL LEVEL EFFECTIVENESS................................................................................. 20
   PERFORMANCE MEASURES ......................................................................................................... 22
RECOMMENDATIONS ............................................................................................. 23
   LOCAL GOVERNMENT ................................................................................................................ 23
   STATE POLICYMAKERS .............................................................................................................. 25
   CONCLUSION.............................................................................................................................. 26
REFERENCES................................................................................................................... 27
APPENDIX A. .................................................................................................................... 29




                                                                            2
Introduction

This project examines the management of formal intergovernmental economic development
agreements in Iowa. A current public policy interest in Iowa is increasing the collaboration
between local government units to increase the effectiveness and efficiency of government
services to citizens. Iowa Code 2003 §28E permits any public agency in the state to enter into an
agreement with one or more public or private agencies for joint or cooperative action. Thus,
communities are able to formalize collaboration by using 28E agreements in a variety of areas,
including economic development. However, little is known about the effectiveness of these
agreements in Iowa.

The relationships specified in 28E agreements can be viewed as structured or formalized
networks. Networks between cities and/or counties create a countywide approach to economic
development. The questions are: How effective are these networks? To what extent are the cities
involved able to look beyond their city limits to focus on countywide economic development?
What skills and processes encourage a countywide perspective? Public management scholars
have started to identify the processes that are part of network management. Little research has
identified what skills and processes lead to network effectiveness.

The purpose of this project is to identify management skills and processes that contribute to the
effectiveness of networks related to 28E agreements created for economic development
purposes. The first part of this report provides the foundation for the study. It defines networks,
describes the need for economic development (ED) networks, defines effectiveness, and
identifies processes and relationship qualities useful for managing networks. The second part is a
comparative case study of three counties in Iowa with countywide ED networks and identifies
the skills and processes that contribute to or inhibit network level effectiveness.


Understanding Economic Development Networks

Definition of Networks

Networks are “structures of interdependence involving multiple organizations or parts thereof,
where one unit is not merely the formal subordinate of the others in some larger hierarchical
arrangement” (O’Toole 1997, p. 45). Networks are held together by forces such as authority
bonds, exchange relations, and coalitions based on common interests (ibid). In local economic
development, city governments build networks with a variety of public and private agencies to
strategize, plan, and implement custom-designed policies to increase the economic well-being of
the community.

Networks form and collaboration happens because no one agency has all the expertise, authority,
or resources needed to address the complexities of a problem. Agranoff and McGuire (2003)
suggest that this creates the “interdependence” in networks, and they define network activity in
terms of collaborative linkages, which are “multiorganizational arrangements [for] solv[ing]

Managing Effective Economic Development Networks                                                3
problems that cannot be solved, or solved easily, by single organizations” (p. 4). Collaborative
management can be informal (gathering information) or formal (negotiated agreement) (ibid.).

The Need for Economic Development Networks in Iowa

Iowa is undergoing a persistent and systematic structural economic change. This is leading to a
reorganization of agricultural production and regional trade. While smaller towns are struggling
to maintain their service and retail capacity, larger towns are growing. This is leading to an
increased urbanization of the state’s population.

A community’s capacity to grow is a function of the infrastructure, the size and characteristics of
the labor force, the distribution and quality of local public services, land, financial capital, and
facilities (Kane 2004). Not all communities are equally endowed with size, institutions, services,
or transportation systems that support growth (Swenson 2005). Small communities are at a
disadvantage. By talking together and forming networks, not only can communities identify their
own attributes, but they can also identify regional attributes useful for economic development
efforts (ibid.).

There are several benefits for communities when they work with other communities on economic
development (ibid.). First, it allows them to pool scarce resources to more efficiently serve a
larger area. By pooling funds, they are better able to acquire core technical and professional
capacities. Second, by creating a central point of contact serving as the clearinghouse for
information, they streamline the ability to give and receive information about resources located
throughout the county. Finally, a network of communities is able to market an economic
development capacity that is bigger than any one community in terms of labor force,
infrastructure, and public services.

Levels of Network Effectiveness

The first step in evaluating network effectiveness is to define it. However, the messiness of
networks and the multiplicity of players and interests raise difficult questions about who to hold
accountable and who determines effectiveness. Establishing whether or not a network is effective
is “critical from the perspectives of those organizations that make up the network, those who are
served by the network, and those whose policy and funding actions affect the network” (Provan
and Milward 2001, p. 422). Effectiveness may be evaluated differently depending on the lens of
the stakeholder.

Provan and Milward (2001) suggest that networks can and should be evaluated at community,
network, and organizational/participant levels of analysis. Community level effectiveness is
satisfying the needs of clients and other community-interest groups. Network level effectiveness
is how well the member agencies act as a network. This includes attracting and retaining network
members, providing needed services, and developing relationships and an administrative
structure. Participant/organizational level effectiveness is how well network involvement
benefits each agency. These definitions indicate that effectiveness may be viewed from different
angles.


Managing Effective Economic Development Networks                                                 4
It is possible to begin to define network effectiveness for economic development agreements
using the different levels (community, network, and organizational) in the network effectiveness
framework of Provan and Milward (2001). County or regional level effectiveness is how well
the network contributes to the economic development of the county and whether the county does
ED better with coordinated efforts than with fragmented, autonomous efforts. In reality, it is very
difficult to show that the efforts of an economic development group have led to economic
growth. Further work needs to be done to define a way to measure community/county level
effectiveness for ED. That issue is beyond the scope of this study and county level effectiveness
was not measured.

Network level effectiveness, how well entities work together, is the major interest of this study.
Network level effectiveness for ED is defined by the commitment of individual communities to
the goals of the network, that is, a countywide ED effort. Presumably, when individual
communities are committed to a countywide effort, there will be increased capacity to develop
resources and sites, increased ability to accumulate and distribute information about the region,
and increased ability to use portions of each entity’s expertise.

Network level effectiveness was measured in several ways. The primary measure was by the
ability of individuals to articulate the reasons for countywide economic development. In
addition, participants’ ratings of the achievement of network objectives and the equitable
distribution of costs and benefits of the agreement were used to assess participants’ perceptions
of how well the entities work together. With this working definition of effectiveness, the next
step is to identify related skills and processes that contribute to effectiveness.

Another way to measure effectiveness of ED networks is at the organizational level.
Organizational effectiveness recognizes that agencies and their managers are motivated partly
by self-interest. Organizational effectiveness is how well the network benefits each agency. In an
effective ED network, the benefits of participation for an agency would outweigh the costs. For
this study, organizational effectiveness was measured by the costs and benefits for participating
in the 28E agreement that agency representatives reported and the representatives’ assessments
as to whether the benefits were worth the costs. Presumably, entities would only remain involved
in the network if the benefits outweigh the costs.


Barriers and Challenges to Network Effectiveness

While networks have the potential to unleash creative power to solve complex problems, they
also have downsides. There are barriers and challenges to each level of effectiveness. For
community level effectiveness, one concern is how to determine if the outcomes of a network are
in the public interest since decisions may occur in private. Berry et al. (2004) argue that
questions about success must include for what, for whom, and at whose expense.

There are challenges for network level effectiveness, too. An extremely cohesive network has the
potential to develop “groupthink” and to discourage the flow of new ideas and competing points
of view (Berry et al. 2004). O’Toole (1997) asks if networks “catalyze tendencies for further


Managing Effective Economic Development Networks                                                5
diffusion [of responsibility], or do they encourage more responsible conduct and consciousness?”
(p. 50). Turf issues could be another network level challenge.

For organizational level effectiveness, Bartle and Blair (1999) found that cost savings from
intergovernmental cooperation had to be balanced against “the increased transaction costs of
negotiating, monitoring, and enforcing interlocal agreements” (p.15). Such costs may include
lost time, money, consuming human relations processes, and the loss of control of resources.
These are costs an agency must weigh against the benefits of network participation. Formal and
informal relationships and proximity in distance can lower costs, such as time needed for
meeting and communicating (ibid.).

Network Management

Researchers are beginning to describe the practice of managing networks in terms of critical
actions and behaviors (McGuire 2002, Agranoff 2003, and Klijn 1996). Because there is usually
no formal hierarchy, processes within networks must be managed differently than in a traditional
bureaucracy. Network actors must establish the structure, norms, rules, processes, and
relationships that will be guide their interaction. The following provides categories of
management techniques, skills, and issues relevant for the network manager. How well these
components are managed is likely to influence network effectiveness.

Participant selection. A key skill for network managers is what McGuire (2002) refers to as
activation, which is “identifying and incorporating persons and resources needed to achieve
program goals” (p. 602). Selecting the right collaborative partners is an important step in the
formation of a network. Network founders must find organizational representatives who have the
needed resources—information, expertise, authority, or money—to aid in the accomplishment of
the goals as well as include key stakeholders who could potentially oppose a project (Agranoff
2003). It is also important to have representatives at the table with the power to make decisions.

Operating structure. Another skill of a network manager is to “frame” or facilitate agreement on
participants’ roles, operating rules, and network values (McGuire 2002). A network consists of a
pattern of relations and such patterns will generate rules that give stability to a network (Klijn
1996). One way to change a network is to change the informal or formal rules of interaction
(ibid.). In addition to roles, rules, and values, the operating structure may include issues such as
funding and the frequency and content of meetings.

Provan and Milward (1995) identified the importance of a network administrative organization
(NAO), which is a local administrative entity, to lead, coordinate, and govern network growth
and maintenance. While networks can function without an NAO, they must then rely on network
participants for network governance. Non-NAO networks require a high level of commitment to
network goals and to interorganizational cooperation by member agencies and that is difficult to
sustain (Provan and Milward 2001). On the other hand, the existence of an NAO helps to
coordinate and legitimize network activities and to monitor service provision.




Managing Effective Economic Development Networks                                                 6
Communication of information. Good communication is critical to sharing information and
promoting a network (Agranoff 2003). Good face-to-face communication in meetings is also
important, including being able to speak openly about individual agency needs and listen
patiently to the views of all the people at the table. Electronic communication is used to transmit
the work of the network, schedule meetings, and provide technical and program information.
(ibid.).

Communication can also be used to help the network expand its knowledge. Communicating
outside the network with individuals who have special expertise is important as well as finding
ways to share information and utilize the expertise that each member brings (ibid.). Being able to
facilitate consensus building helps members to process information and gain a shared
understanding of an issue (Innes and Booher 1999).

Decision-making. The nonhierarchical structure of networks affects the decision-making
processes. In this context, authority is shared because no one member has all the answers or the
ability to solve problems alone (ibid.). Agranoff (2003) found that network decisions are most
always made by consensus rather than voting, although many of the networks he studied did not
require the formal adoption of collaborative courses of action or decisions about controversial
issues. Innes and Booher (1999) say that the decision-making process cannot be separated from
the outcome and if an agreement were reached by a process that was not regarded as “fair, open,
inclusive, accountable, or otherwise legitimate, it is unlikely to receive support” (p. 415).

Accountability. Once effectiveness is defined for a particular network, processes can be defined
to hold network partners accountable to the public interest, each other, and to their home
organizations. The multiplicity of network players and interests raise difficult questions for
determining accountability. Thurmaier and Wood (2002) found a lack of concern for fiscal
accountability among those they interviewed about interlocal agreements.

External links. Networks do not exist in a vacuum. Network managers must stay mindful of the
links to external stakeholders or experts who are important for network success. It is important to
develop commitment and support for the network from external stakeholders, such as elected
officials and the agency head (McGuire 2002, Agranoff 2003). Having top-level agency support
is important for network members to be able to commit agency resources to the network project.
Each network member must maintain good communication with the home agency and make sure
key program specialists are informed of what the network is doing. Finally, network members
must be able to balance agency and collective concerns (Agranoff 2003).

Cohesion and trust. Networks require people to collaborate voluntarily and certain conditions
favor this behavior. Networks are held together by resource dependency, shared purpose, and
trust (Agranoff and McGuire 2003). Each person brings to the table some amount of resources
to share (funding, support, expertise, and human resources), although amounts vary (ibid.).
Network managers must use what McGuire (2002) calls “synthesizing” behaviors “to create an
environment and enhance the conditions for favorable, productive interaction among network
participants” (p. 603). The challenge is to promote cooperation while minimizing barriers that
may interfere with achieving the network purpose.


Managing Effective Economic Development Networks                                                7
One factor that creates cohesion is trust. Trust may come from pre-existing relationships and/or
be built from consensus building, being open about agency agendas, sharing individual
information, completing small tasks and building on them, and meeting together over time
(Agranoff 2003). Zaheer, McEvily, and Perrone (1998) found different levels of trust in the
multiorganizational context: interpersonal and interorganizational. Interpersonal trust is the
extent of a boundary-spanning agent’s trust in her counterpart in the partner organization.
Interorganizational trust is the extent of trust placed in the partner organization by members of a
focal organization. Although interpersonal trust may contribute to interorganizational trust,
Zaheer et al. found that “when an exchange is carried out between organizations with an
institutional pattern of dealings, the interorganizational context becomes more prominent” (p.
156). Interorganizational trust is more dominant in influencing long-term exchange relations.

Power. There are different aspects of power to manage in a network setting. The power to bring
about cooperation is valuable, especially when no player has control over any of the others. In
reality, some network members may have knowledge, financial resources, organization position,
legal authority (Agranoff 2003) or social capital that can be used to influence the behavior of
others in the network. This power can be used to facilitate or inhibit collaborative action
(Agranoff and McGuire 2003).

Stability. Another factor that that affects network performance is the stability of personnel.
Because networks involve forming relationships with other partners, turnover in personnel
impacts the activities of the network to the extent that it takes time for partners to get to know
each other and establish working relationships. O’Toole and Meier (2004) found that managerial
and personnel stability seem to have a positive impact on network performance. They conclude,
“stability is a platform for risk-taking, entrepreneurial action in networks” (p. 491).

The Management of Effective Economic Development Networks

The skills and processes identified from the literature make up the toolbox public managers
would be expected to use to develop an effective network. Figure 1 shows the potential
relationship. The model proposes that processes and qualities of relationships are interactive.
That is, processes may contribute to the qualities of relationships (trust, stability, power) and that
the qualities of relationships may influence the processes needed. The purpose of this research is
to see whether or not these processes and relationship qualities contribute to network level
effectiveness. Presumably, they would also have an effect on county level and organizational
level effectiveness as well.




Managing Effective Economic Development Networks                                                   8
Figure 1. Processes and relationship issues that impact network effectiveness

                                                    Network Effectiveness
 Processes
 Participant selection                               County level
 Operating structure                                 Overall enhancement of the economy and
 Communication of info                               public benefits/costs
 Decision-making
 Accountability
 Maintenance of external
 links                                                Network level
                                                      Commitment to countywide ED



                                                      Organizational level
 Relationships
                                                      Benefits outweigh costs of participation
 Cohesion and trust
 Stability
 Power



Methodology

A comparative case study approach was used to evaluate the effectiveness of countywide ED
networks using 28E agreements. To get an initial evaluation of the management and operation of
28E ED agreements, written surveys were sent to entities that created or amended 28E ED
agreements in Iowa between 1993 and 2004. The survey asked about the reason for establishing
the agreement, effectiveness and efficiency of the service delivery as a result of the agreement,
and modes and frequency of interaction with agreement partners. Any 28E agreement in which at
least one partner returned the survey was considered eligible for further study.

Partners responded from over 35 different 28E agreements. Six involved multiple entities for
joint economic development activity. Of these six, three 28E agreements were chosen for field
interviews. These agreements were chosen because they had similar purposes (countywide
economic development) and similar partners (county government and multiple city governments
as well as partners from both the public and private sectors).

Field interviews were scheduled with as many partners in each agreement as possible. A total of
24 interviews were conducted. In county 3, three network actors declined to be interviewed and
in county 2, one person declined to be interviewed. The refusals were mostly due to being
unavailable during the period interviews were conducted. One city council member in county 3
declined because he was new to the county ED commission and did not think he had enough
information. A special emphasis was given to public sector partners because the focus of this


Managing Effective Economic Development Networks                                                 9
study was intergovernmental agreements, although four interviews were conducted with private
sector representatives. For two counties, at least one representative from each jurisdiction
involved was interviewed. For the third county, not all members were interviewed because the
28E agreement created two networks and time did not allow contacting everyone from both.
Instead, a selection of members from each sub-network was interviewed. A summary of those
interviewed from each county is given in Table 1.

Table 1. Summary of interviews for each county
Information about network   County 1           County 2                   County 3
                            Alliance           County ED Commission       County ED Commission
                                               (EDC)                      (EDC)
                                               All towns                  Some towns
Who is involved in 28E      -County            -County                    -County
                            -Four              -All towns in county       -City council members from
                            communities with   -Co. Bankers               the 3 towns that chose to
                            ED staff           -Private ED groups from    participate
                                               the largest town           -Development corporation
                                               -Chamber-largest town      representative for each town
Number of people in         3 Co.Supervisors   7 county EDC members       1 county supervisor
network                     4 local ED         12 clerks/city councils    3 city council members
                            directors          1 county EDC director      3 city ED representatives
                                                                          1 county EDC director
Percent of network          86%                57% of county EDC          63%
members interviewed                            42% of cities


All field interviews were based on a discussion guide developed by the 28E research team
(faculty and graduate students in the Public Policy and Administration Program at Iowa State
University) and approved by the Iowa State Institutional Review Board. Before the interview,
each interviewee was informed about the purpose of the statewide 28E study and confidentiality.
Interviewees were told that no information would be attributed specifically to them without their
permission. Interviews lasted approximately one hour and were taped with the permission of the
interviewee. Most people were interviewed individually, although in two cases two individuals
from the same entity were interviewed at the same time. Most interviews were conducted in
person; seven were conducted by phone.

Information from the interviews was analyzed relative to questions of network level
effectiveness. Answers were summarized for each county and then comparisons were made
between counties. Also, the numerical rankings of effectiveness and efficiency from the written
surveys for each network were compiled and the median calculated. Because the written survey
was geared to government entities, only public sector network members were asked to fill it out.

Results

Table 2 summarizes the responses to the written surveys from the members of each county
network. These results are based on eleven responses as shown in the table. For two counties, the


Managing Effective Economic Development Networks                                              10
responses represent 75% of the public entities involved in the 28E agreement. County 3 had the
highest rankings in all categories. County 2 had slightly higher ratings than county 1 in all
categories except for equitability of benefits. Effectiveness of the 28E agreement received the
lowest ranking for all three counties. Individual survey responses are included in Appendix A.

Table 2. Written survey responses on network level effectiveness
                                                         County 1      County 2    County 3
                                                                      5/6 public
                                                         3/4 public   entities     3/4 public
 Surveys Completed                                       entities     contacted    entities
 Survey Question
 How well has this 28E agreement been able to achieve
 its stated objectives?                                       2            2           3.5      SCALE of 0--4
 How well has this 28E agreement been able to                                                   0=NOT AT ALL
 increase the efficiency of providing this public
 service?                                                    1.5           2            4       2=SOMEWHAT
 How well has this 28E agreement been able to
 increase the effectiveness of providing this public                                            4=VERY WELL
 service?                                                     1            2            3
                                                                                                SCALE OF 1--5
 How would you rate the sharing of costs associated                                             1=VERY
 with this agreement?                                         2            3            5       INEQUITABLE
 How would you rate the sharing of benefits associated                                          5=VERY
 with this agreement?                                         4           2.5           4       EQUITABLE

A representative sample of written comments from the surveys about benefits and problems
associated with participation in the 28E agreement is provided below.




County 3
    “The 28E provides reassurance to the 3 participating cities that everyone, including the
    county, are given equal authority and voting rights. This allows all participants to focus on
    [the] goal of promoting economic growth, [regardless] of where growth may happen in the
    county.


While this is a small number of total surveys, the responses provide a starting point for
evaluating the effectiveness of these three networks. In order to understand the context of these
comments, a brief description of each county network is given below. This is followed by an
analysis of the factors contributing to network level effectiveness.




Managing Effective Economic Development Networks                                                       11
County 1—Alliance of Professional ED Directors

The 28E agreement for county 1 was created in 2001 and committed county funding to an
alliance among three communities, each with a professional ED director. Later, a fourth
community with an ED director was added. The communities range in size from about 850 to
5,500 in population, although the three most active range from 1,700-5,500. The county pays
each director to spend time on countywide projects and to assist other communities in the county
that do not have ED directors. In return, the directors must attend a quarterly meeting with the
county board of supervisors and submit a quarterly report of activity. At the meeting, the
directors report on individual accomplishments, goals for the future, and prospects. Figure 2 is a
diagram of the county 1 network alliance.

The unattached circle is the smallest community, which is currently inactive. Technically, city 4
is a party to the 28E ED agreement. However, it is the smallest community (population 850) in
the network and has become inactive in the alliance. That was partly due to the ED director’s
schedule, but also due to different organizational needs. The ED director in this community
found it more beneficial to partner with a different alliance—a group of like-sized communities
in a specific region (which crossed county lines) and that had more issues in common.


Figure 2. County 1 network



                                              County
                                            Supervisors




         ED Director                                                             ED Dir
           City 1                                                                City 3




                                                                          ED
                                             ED                          Dir 4
                                           Director
                                            City 2




Managing Effective Economic Development Networks                                              12
County 2—County ED Commission (EDC) with a Link to All Cities in the County

The 28E agreement in county 2 is the oldest of those studied, having been formed during the
economic crisis of the 1980s. It established a county economic development commission, which
is run by a paid director. County 2 has one community over 5,000 and the rest of the 11
communities are under 1,000 in population. The 28E arrangement established a board of
directors for the commission and an agreement that the county and each community in the
county would provide financial support.

Figure 3 is a diagram of the network in county 2. The county EDC is the hub in the center of the
figure. The county EDC board of directors is composed of seven designated representatives.
Four represent the private sector (development group [Dev in figure below], chamber of
commerce [CoC], banks, and industry [Ind]) and are currently from the biggest town. Two
represent the public sector—the big town (city) and the county (Co). One represents the small
communities and is appointed by the mayors; this person is currently from the private sector. The
subnetwork extending from the hub is the small communities network principally consisting of
interactions among the city clerks.

Figure 3. County 2 network




                         CoC
                Dev

                                 City
          Ind         Dir

                                 Co
            Banks
                        SC




             County ED Commission                            11 small communities



The dark shapes represent the public entities that are partners in the 28E agreement.




Managing Effective Economic Development Networks                                            13
County 3—County ED Commission (EDC) with Representatives from Interested Communities

The 28E agreement for county 3 was established in 2000. This 28E agreement also created a
county economic development commission, which has a paid coordinator. The champion of the
network was a county supervisor who was concerned when a business approached the county
and the county had no central point of ED coordination. The communities range in size from
about 500 to 3,500 in population. The founders decided that each community would have two
representatives—a city council member and a local development corporation (LDC) member. A
county supervisor also serves on the county EDC. Each member has one vote. This network is
shown in Figure 4. The hub is the county EDC headed by a paid director.


Figure 4. County 3 network




                                                      LDC1

                                                             C1
                                    C2

                                 LDC2             Dir

                                                                  Co


                                      C3
                                               LDC3




                                      County ED Commission



The dark circles represent the public entities that are partners in the 28E agreement.

Table 3 summarizes features of each county network. Within most features, there are two
counties that are similar and one that is different. For example, two of the networks are about
five years old and one is over 15 years old. This provides an opportunity to compare and contrast
different conditions and study the impact of the nuances of similar features. For example, county
2 and county 3 both have county EDCs. However, the representation on these EDCs is very
different.




Managing Effective Economic Development Networks                                             14
Table 3. Features of the 28E economic development networks studied
Network History     County 1                  County 2                    County 3
and Features        Alliance                  Co. EDC; all cities         Co. EDC; some cities
How long 28E has    4 years                   15+ years                   5 years
been in effect
Impetus for         Town ED Directors         Economic crisis             No central point of
forming an          wanted countywide         Biggest town led the        coordination for county
agreement           effort                    effort                      business lead
                                                                          County supervisor initiated
                                                                          the effort
Who is involved     Communities with          All communities             Communities that choose to
                    ED Directors and that                                 participate
                    choose to participate
Do all 28E          Yes- county supervisors   No-Board of Directors of    Yes-Board of Directors of
partners            in consultation with ED   County EDC (7 public        County EDC has reps from
participate in      Directors                 and private reps total, 1   all entities
making decisions?                             rep for small
                                              communities)
Funding             County pays each local    County and each             County and each
                    EDC                       community contributes       participating community
                    Per capita                Per capita                  contributes
                                              Private sector              Per capita
                                                                          Private sector
Structure           Alliance                  County EDC Director         County EDC Director

Frequency of        Quarterly                 Monthly—EDC                 Monthly
regular face-to-                              Annually—all
face meetings                                 communities
County population   18,404                    18,812                      10,874
(U.S. Census
Bureau 2000)


Network Level Effectiveness

Network level effectiveness was measured by the commitment of each 28E partner to the goal of
a countywide ED effort. The majority of people interviewed in all three counties could articulate
reasons for participating in countywide economic development. They were aware that workers
frequently live in one town and work in another. Also, industrial development had happened
outside city limits in county 1. Others commented that they were working together for the county
and that when they pooled their resources, such as the number of workers, they were stronger
than each community on its own. A city council member from county 3 said,

    “We are all in the same boat. We are trying to build the county and the city, trying to get
    more business, housing, and people, and trying to keep what is here, here…It used to be
    awhile back that people fought each other but as soon as we started with [the county
    commission], that all melted way…There is still probably still some of that, but as far as


Managing Effective Economic Development Networks                                                    15
   anybody on the councils and the [county] commission, they pretty much know that everyone
   is in the same boat in the county. We have to be as one group to get anything.”

The county 3 supervisor interviewed said,
   “…The [county ED commission] also provides a valuable resource for coordination of
   infrastructure, data, and statistics for all members.”

There were some exceptions to this view. Some did not see the benefit of a business locating in a
town other than theirs. One town was trying to keep its grocery store and was concerned that if
people work in another town, they will shop there as well to the detriment of the local grocery
store. Many of those who articulated the value of working together as a county also said that
their first priority was landing a business in their community. One person said, “We are all in the
basket together. If [our town] can’t have [a business], we wish you could.” The first priority was
one’s own community. If that did not work, then the hope was that the business stayed in the
county. In all three counties, there was an understanding of the value of working together, yet for
most town representatives, the priority still centered on one’s home community.

Operating Structure

Operating structure does play a role in maintaining a countywide commitment, to the extent that
it exists, and thus, contributes to network level effectiveness. County 2 and county 3 have a
county ED commission (EDC) and paid directors to lead countywide activities. For this reason,
these counties have a structural edge over county 1 in network level effectiveness. While county
1 is the only county that has had network actors work together collaboratively on a county
project, it does not have an operating structure that ensures countywide commitment. One ED
director described it as only “a somewhat coordinated county wide development effort.”
Each ED director is primarily accountable to the home community and secondarily responsible
to the county. This forces the ED directors to do a delicate balancing act with the scales
structurally tilted in favor of the community of origin. The alliance relies heavily on
interpersonal trust and is vulnerable to instability. When a network member leaves, as has
happened, the network is shaken and there is no guarantee of a replacement’s level of
commitment to county efforts.

On the other hand, in counties 2 and 3, a countywide commitment is easier to sustain because of
the operating structure. These counties have established a county EDC, which serves as a
network administrative organization (NAO). The EDC includes a paid director whose job it is to
focus on the entire county. A city clerk from county 2 said, “At a time when it is important for
our communities to be more “regional minded” this entity has been actively involved in working
with our communities to assist with planning and sharing of services.” Consistent with the
findings of Provan and Milward (1995), the existence of an NAO seems to increase ED network
level effectiveness. A county EDC institutionalizes the commitment to a countywide approach
and this commitment endures beyond individuals, thereby creating interorganizational trust.
Therefore, these networks are not as vulnerable to issues of personnel instability. The
commitment to a countywide approach is not dependent on specific individuals and their



Managing Effective Economic Development Networks                                              16
interests; the structure helps to ensure that the network remains intact and countywide ED efforts
continue.

Network partners in counties 2 and 3 said they valued the work of county EDC directors, the
agents of the county EDCs. The county EDC directors provide a central point of contact for
businesses and coordination of countywide information on infrastructure, data, and statistics.
County EDC directors and their assistants serve as “the hub in the wheel” to keep projects
moving and provide direction and guidance to the EDC. The county EDC directors are paid to
work on county projects; most other network actors maintain other jobs, which may or may not
pay them for the time it takes to participate in the network.


Participant Selection

County 3, the county with the highest rating in the written survey by network members, differs
from the other two counties in two areas: participant selection and pre-formation decision-
making. In selecting participants, one county 3 interviewee said it was just “luck” that they had
people with the right “personalities.” However, upon closer examination, there were several
steps the county took that created its own “luck.”

First, most towns in the county were invited to an initial meeting about a countywide EDC. Eight
towns attended the first meeting and of those, three made the commitment to continue with the
process, which involved numerous meetings over a nine-month period. Through this process,
those people with the right “personality” could self-select by virtue of their ability and
willingness to engage in a process with the advertised goal of working together for the county.
Those who persisted were open-minded, could leave their turf at home, shared a common vision,
were committed to making it work, and were willing to spend time to work through issues. “If
you don’t have the attitude to help the whole group, then it’s not going to work” was the view of
one county 3 participant. Finding those who have common values and vision and building a core
group from there seems to be one key to participant selection.

Another interesting aspect to participant selection in County 3 is who was selected to be on the
county EDC. Members of that commission include one county supervisor and two
representatives from each town involved. The two representatives consist of a city council
member and a local development corporation representative. This arrangement does two things.
First, it gives each participating community an equal voice. Second, it provides a direct line of
communication to two key groups the county EDC needs for support: funders (city council
members and county supervisors) and local actors with expertise (economic development
groups). This differs from county 1, which does not include city council members, who must
approve the use of city staff’s time for county efforts. It also differs from county 2, which has
one representative on the county EDC for all 11 small towns.

County 2’s approach of incorporating all communities rather than only those that express interest
has its pros and cons for network level effectiveness. On one hand, it is the only county network
that is, in fact, countywide because all communities are involved. On the other hand, not all


Managing Effective Economic Development Networks                                              17
communities feel like the network meets their interests, as indicated by responses from the
written surveys:

   “This agreement has brought together the city clerks…this has established a close
   networking system. This agreement has not stimulated economic development.” [emphasis
   added]

   “…direct benefit seems to be going to [the largest town], the smaller communities are not
   feeling as benefited.”

The dissatisfaction with the effectiveness of the network by some communities may be because
the communities have different capacities to grow their economies. The large community has the
infrastructure needed for business retention and recruitment. The small communities mainly
provide a quality place to live although they also desire business retention and recruitment. The
commission has not established a way to resolve these tensions. County 3 addressed these issues
in the decision making process used to create its 28E agreement.

Decision-making

The county supervisor interviewed in county 3 noted that trust and power issues had to be
addressed before the communities would agree to work together. County 3 has three
communities involved, with populations of about 3,500, 1,000, and 500. There were initial
concerns that the county EDC would only benefit the largest town. The smaller communities
wanted to make sure they would have a voice and receive some benefit from participation in the
county group. Consensus-building was used in the pre-formation process to create a structure
that would alleviate the fears and concerns.

The process involved all 28E partners and resolved the issue of power by establishing the one
person, one vote policy and by giving each community the same number of votes. According to
one member, “equal authority and voting rights allows all participants to focus on the goal of
promoting economic growth, irregardless [sic] of where growth may happen in the county.”
Interestingly, under this arrangement, the county supervisor is outnumbered, although the county
board of supervisors still has power since it is a major funder.

Communication

All three counties identified communication of information as an important aspect of the
network. Communication is the lifeblood, if not the heart, of the system. One of the major
benefits of the ED networks is the exchange of information. The bulk of the work for all three
networks is reporting activities; they engage more in exchanging information than policy
making. Being able to have a central point to coordinate information was the reason county 3
formed a county EDC.

Communication and trust feed on one another. Partners must trust each other to communicate
information, such as business prospects and current projects, and as partners communicate


Managing Effective Economic Development Networks                                              18
projects and gain assistance from other communities, more trust develops. Monthly face-to-face
meetings were mentioned in county 3 as being important to build relationships and keep the
network alive. The county EDC in county 2 also has monthly meetings. County 1 has quarterly
meetings, which provide a time for information exchange but do not seem to lead to the
cohesiveness of the group.

Network members did not speak much about communicating with their constituency groups.
Some spoke about the importance or necessity of not communicating some information to their
constituency. Several participants mentioned that information about business prospects is
something they often want to keep confidential.

Relationship Issues

These results show that creating a network administrative organization, using inclusive decision-
making processes, and communicating face-to-face monthly increase network level
effectiveness. These findings do not show that pre-existing relationships are necessary for
effective networks. Only one 28E agreement, county 1, was established by people who had pre-
established relationships. “The strength of the whole thing relies on personal relationships,”
stated a member of the county 1 alliance. However, the original relationships in county 1 were
not sufficient to sustain the network after founding members left. The other two counties formed
their 28E agreements in response to specific events or conditions. For these networks, they had
to build the relationships over time. In these cases, the processes were conducive to establishing
effective working relationships and institutionalizing them.

County 2, being the oldest network, has a unique perspective on relationship maintenance once
the network is established. One seasoned 28E participant from that county said that the
countywide network is “like a marriage—you have to keep working and investing in it. Just
because a town supported the 28E last year doesn’t mean they will always do so.” What worked
at one time, such as the annual meeting for all towns, may not work forever. Activities grow stale
and lose their effectiveness. Also, this person advised “it is important to spend more time and
resources on [relationships] than would seem to make sense [based on what the town is paying].”
This has been important in county 2 where the county EDC director spends a significant amount
of time visiting each town. Although this may require more time than the face value of a town’s
financial contribution, the county values having the buy-in of all the communities.

Stability impacts the trust level but this is especially evident in county 1, which is an alliance that
depends on interpersonal trust. The other two 28E agreements established an organizational
structure that exists beyond individuals. Although interpersonal trust is important in maintaining
partner participation, it seems as though interorganizational trust is more important in those 28E
relationships. It is the equal representation for each community in county 3 that creates trust,
although it also helps that participants share a common vision.




Managing Effective Economic Development Networks                                                  19
Organizational Level Effectiveness

Organizational level effectiveness is another aspect of network success. Even if entities are
committed to working together, a network will not endure if each entity incurs more costs than it
receives in benefits for participating. Organizational effectiveness was evaluated based on the
costs and benefits interviewees identified for their entity’s participation.

It is important to note that there are two fundamentally different approaches to services in the
three counties. Members in county 1 are paid to provide services. Members in county 2 and
county 3 pay to receive services. A summary of the costs and benefits reported for all counties is
provided in Table 4. Since counties 2 and 3 both have a county EDC and a paid county EDC
director, the responses were similar and combined in the table. These counties identified fewer
costs than county 1. A city manager in county 2 noted that “jointly these groups can afford staff
that we couldn’t afford on our own.” However, tight budgets for local governments were leading
some to cut funding for the county 2 EDC. Counties 2 and 3 also identified other benefits besides
those related to ED, such as improved relationships between the city and the county and the
assistance of the county EDC director on other countywide projects besides ED.

The operating structure inhibited organizational effectiveness in county 1. The ED directors from
each community are paid to spend time focusing on county projects. However, payment is based
on town population, not the amount of time an individual actually devotes to the county. Some
were concerned about this, although individual commitment seems to drive countywide efforts in
county 1 rather than payment for services.




Managing Effective Economic Development Networks                                             20
Table 4. Benefits and costs for organization participation in 28E ED network
Benefits                                            Costs
County 1                                            County 1
Nice to have others to bounce ideas off each other  Takes time away from community efforts

The county has three professionals to work on           Not compensated based on amount of work
issues; they can divide responsibilities to deal with   performed but on per capita basis
the impact of a big project
                                                        Payment does not always cover amount of time
Each ED director has a set of strengths the county      spent
can draw upon
                                                        Must educate local officials about why it is
County ED receives attention despite the lack of        important to work outside the community
time county supervisors have to devote
                                                        Must remind county supervisors that ED directors
Can work together ahead of new development to           have other jobs
prepare each community, e.g. if a large new
business is coming to one town, the others can be
prepared to address housing

Each community has more bargaining power—
county population of 18,500 is more than any
individual city

Reduces costs of labor shed assessment and
marketing materials

Counties 2 and 3                                        Counties 2 and 3

Learn through county EDC director about ED              Money (cities pay per capita)
programs and conferences available
                                                        Time for meetings
Provides economic development resource small
communities could not afford on their own or that
county and city officials do not have time to
provide

Available property gets exposure through county

Increased awareness of what each town has

Feedback from county EDC director on grant
applications for small towns

Improves relationships between cities and county

County EDC director facilitates other countywide
projects, such as establishing a countywide
endowment, that benefits the community



Managing Effective Economic Development Networks                                                       21
The organizational level effectiveness of county 2 was a step higher. In this case, communities
pay $2 per capita to support the county EDC. In exchange, they receive the services of the
county EDC director. Everyone interviewed in county 2 believes the amount they are paying is
worth the benefits they are receiving. However, there was concern expressed among the small
communities that they had not seen the same economic development benefits as the largest
community. In county 2, all communities were initially involved, but some communities had
dropped out for a period of time due to budget issues, not getting needs met, or the personality of
the county EDC director. These cities tended to rejoin later. In addition to the structure,
communication and interpersonal trust that develop between the county EDC director and the
city clerks impacts the clerks’ satisfaction with the benefits they are receiving for participating in
the 28E agreement.

County 3 had the highest organizational level effectiveness. Everyone interviewed in county 3
expressed satisfaction with the benefits they receive from participating in the county EDC. No
one expressed concerns about costs that were unfair or activities that did not meet their needs. A
representative from the smallest town said, “It’s ok if other towns get more help, we get help
when we need it.” He was also able to acknowledge that his town had to be realistic about other
towns being more desirable because of their existing infrastructure. The structure, participant
selection, and decision making process gave each community an equal voice in guiding the
activities of the network, which in turn, allowed them to make sure there were enough activities
that met their needs and that their benefits of participating outweighed their costs.


Performance measures

No county has performance measures to determine network effectiveness. However,
interviewees had many suggestions for possible performance indicators. These included ideas
such as reports of activities, documenting businesses that came to the county and who had
worked with them as well as the number of employees and wages, the amount of work being
done on countywide economic development, whether projects are getting done, feedback from
employers in terms of job retention, the number of prospects that have expressed an interest in
the community, being a finalist in a business site selection process as an indicator of
salesmanship, partner satisfaction with the county group, and the continued existence of the
county network.

These measures address all levels of network effectiveness. For example, documenting the
number of prospects that express interest and/or the businesses that come to the county represent
county level effectiveness. The amount of work on countywide ED and the completion of
projects link to network level effectiveness. Partner satisfaction with the county group relates to
organizational level effectiveness. The variety of suggestions for performance indicators raises
questions about what respondents were thinking when they ranked effectiveness on the written
survey. Respondents were not given a definition of what was meant by effectiveness. Even
though this may raise questions about the results, the overall evaluation of effectiveness given
above is based primarily on interviewee comments. The survey results were supported by
respondents’ descriptions of the actual functioning of their networks.


Managing Effective Economic Development Networks                                                 22
Recommendations

The results show that the model in figure 1 is a viable starting point for identifying the skills and
processes that contribute to network effectiveness for economic development 28E agreements.
Participant selection, operating structure, decision-making, communication, and relationship
issues have an impact on interlocal ED network effectiveness. From the analysis of these three
counties, strategies emerge that seem to contribute to network and organizational levels of
effectiveness.


Local Government

The following outline is not meant to be a step-by-step formula. These recommendations are
interrelated and not necessarily linear. Listed below are tips for network participants and
managers, but any network will have to adapt the recommendations to the specific context in
which it exists.

Start with participants who have a common vision and expertise. Participant selection influences
the effectiveness of the network. For ED interlocal networks, it is important to have
representatives with both the ED expertise (e.g. LDC members) and the ability to make decisions
about the funding (e.g. city council members). Besides expertise, it is important to gather
members who share a common vision, are able to think beyond their community, and can see
how the communities are interrelated. This will provide the glue that will help network members
stick with a formation process that may be lengthy and deal with issues of trust and power. While
the initial strategy is to find network members who have common values, this has to be balanced
with the need to include key stakeholders. Also, a network must be mindful of the dangers of
groupthink when a group becomes too cohesive. Having a common vision is important, but it
should not prevent network members from being able to voice concerns or issues that are
important to them.

Create a network administrative organization (NAO). NAOs seem to contribute to network
effectiveness, whereas an alliance provides minimal structure and relies on behavioral
networking. An NAO, such as a county EDC, provides a hub to signify the commitment to
countywide efforts and to coordinate activities. It also provides stability and interorganizational
trust so the network is not vulnerable to personnel turnover.

Having a paid county EDC director seems to be instrumental in keeping projects moving forward
and staying up-to-date with ED programs and conferences. The person chosen as the county
EDC director should have technical expertise and the ability to access information and financial
resources from the private sector. More importantly, the director should be someone who can
build relationships, bring groups together, provide leadership, and put deals together. Small
communities want a county EDC director who will keep them involved, pay attention to their
needs, and let them know of changes in ED programs or actions they can take to improve their
ED opportunities.



Managing Effective Economic Development Networks                                                 23
Counties should be given the flexibility to create a network structure that best meets their needs.
On the other hand, network founders should think ahead of time about the most effective
operating structure and the resulting management implications. In a network that does not
formally involve all of the 28E partners on a regular basis, on-going efforts are needed to build
relationships with these partners, identify their needs, and keep them involved. A network that
provides direct and equal representation for all of the 28E partners makes communication and the
management of the network more straightforward and creates trust. It then has the potential to
increase network level effectiveness.

Use a consensus building process to establish the details of network operation. There is no one
formula for defining the roles and responsibilities of the NAO and network actors can be
involved in deciding these. Being able to express upfront any concerns about power and trust and
addressing these in the establishment of a structure (e.g., equal representation and voting rights)
helps to prevent problems in the long-term operation of the network. An outside facilitator can be
helpful with this process as well as with on-going goal setting. Details such as funding, the roles
of participants, decision-making process, accountability, the frequency and location of meetings
and so on have to be determined by the network. With funding, it is important to look at fairness
and the incentives the funding creates. It is most effective to establish funding that will
encourage a regional perspective and minimize the need to protect one’s own interests.

Practice good communication in multiple ways. Another key component to network
effectiveness is good communication. Face-to-face communication on a monthly basis helps to
keep the network alive. Email and phone communication is important to keep partners “in the
loop” between meetings. It is important for ED network actors to be able to share local prospects
and potential projects, updates on projects in progress, successes, and challenges related to ED.
In addition, it is important for the partners to be able to communicate their needs. Trust is needed
to develop good communication and good communication helps to build relationships and
increase trust.

A county EDC director, if there is one, must pay attention to the needs of member towns. To do
this, the county EDC director must share information as well as listen to the needs of the network
entities and try to address those needs. From the other direction, communities must reach out to
build bridges with the county EDC director. One city clerk said cities should not wait for the
county group to come to them. City representatives have to get to know the county EDC director,
and find out what the director’s interests are and what the director can offer the city. It is
important to be positive and communicate in a way that another will appreciate, yet not be afraid
to ask for what you want and state what is important for your community. County EDC directors
must be visible in all the communities to give the small towns concrete evidence of the county
EDC’s support.

Develop a system for accountability and performance measures. Network actors did not show
any urgency to do this, but it is an important aspect of justifying the use of public money for ED
efforts. Although this study is a step in that direction, how to evaluate the effectiveness of
economic development networks needs further work. One step that may help with this is to


Managing Effective Economic Development Networks                                               24
differentiate between the levels of accountability: county, network, and organizational. This will
help to make sure people are using the same definition of effectiveness. In asking interviewees
how they evaluated effectiveness, some focused on whether or not any businesses had come to
town (community/county level) whereas others focused on whether or not the entities continued
to work together (network level) or the county EDC was satisfying the needs of its members
(organizational level). The suggestions of measures that interviewees provided for this study
could be used as a starting point for developing indicators for each level of effectiveness.

A few words of caution about accountability. First, as was mentioned earlier, it is difficult to
measure the county/community level of effectiveness for economic development. Rather than
focusing on business recruitment and retention measures, one approach may be to evaluate what
is gained for citizens and at what cost. Second, one network member with years of experience
cautioned that what may be evaluated as good or bad at one point in time, may look different at a
later point in time. For example, a ten-year tax abatement may land a company, but when the
business leaves the community in year nine, is this considered a success? On a network level, a
town may withdraw from the network one year, but rejoin a few years later. Third, citizen
accountability is difficult for most networks. It is even more difficult for economic development
networks. One city council member noted that the county EDC struggled with accountability to
taxpayers and funders. They try to be transparent but cannot always be transparent because they
felt some business prospects must be kept confidential. This can be controversial when citizens
oppose certain businesses, such as meatpacking plants.


State Policymakers

The role of state officials is to encourage cities and counties to partner regionally. This may
provide benefits such as the abilities to pool resources to acquire core technical and professional
capacities (e.g., a regional ED director), to create a central point of contact for the region to
streamline communication of ED information, and to market economic development capacity
that is larger than individual entities can offer on their own. Below are specific recommendations
for state officials to support regional networks:

Lead efforts to help regions individually and collectively determine performance outcomes for
ED activity. Outcomes should encourage efficient and effective activity while discouraging
duplication of efforts and minimizing a mere shifting of economic activity from one region to
another. Because local networks have not done so, the state must encourage efforts to define
performance indicators in two areas. The first relates to the performance of regional networks
and how well the networks are functioning (network level of effectiveness). This has been the
focus of this study and includes measures such as shared commitment to network goals,
completion of joint projects, and participation in the network.

The second area relates to performance indicators for the state economy, such as increase in per
capita personal income, growth in average wages, increase in commercial/industrial property tax
base, etc. These measures should be tracked separately from network performance. Measures
such as these provide objective information about the economic well-being of a region and the


Managing Effective Economic Development Networks                                              25
state to put ED activities in context. Note that it is not accurate to claim ED activities cause
economic growth because there is no way to prove this. The economy is much larger than a
region or even the state so it is unrealistic to claim one regional network is changing the
economy. However, these indicators provide objective information to evaluate economic
performance. These indicators should be tracked and publicized but should be reported with the
caveat that ED officials cannot prove ED activities caused these results.

Note: Setting performance measures for the state raises some controversial issues. In general,
how to balance regional outcomes with the overall state (how to help regions see how they fit in
the bigger statewide picture). More specifically, are desired outcomes the same for rural and
urban areas? If not, how are the differences addressed?

Provide technical assistance to define and encourage best practices. State ED officials are in the
best position to see the big picture and results across the state—what is working and what is not.
They can play an important role in promoting communication of best practices between regions.
Local governments can use the recommendations above as a starting point. The state could
provide technical assistance for doing so. The state should resist mandating a blueprint for ED
networks to allow for local flexibility.

Coordinate and facilitate regional and inter-regional efforts. State officials should a) inform
regions of ED activities in other regions and when a duplication of efforts appears, bring affected
regions together to develop a common effort; b) bring regions together to work jointly for the
good of the state, if it appears that one region is taking action to the detriment of other region(s),
and c) provide financial and professional resources for increased technical expertise for needs
such as an analysis of the regional economy, infrastructure analysis, cost-benefit analysis of
providing tax incentives to an industry, and a study of consolidation of services.


Conclusion

This study shows that there are policymakers in communities and counties in Iowa who see the
value of cooperating and sharing services for countywide and regional economic development.
However, there is no single formula for creating a countywide economic development network.
Counties create structures and make choices that arise from local conditions. Yet, there are
factors that contribute to network effectiveness. In the counties studied, participant selection,
operating structure, decision-making processes, and communication of information impact the
level of trust and network level effectiveness (the commitment of network actors to network
goals).

Because this was a small study focusing on rural counties, further research must be conducted to
see if these findings can be generalized and apply to others. At a minimum, the model in figure 1
may serve as a checklist of processes and relationship qualities for network partners to assess
when they are concerned about network effectiveness.




Managing Effective Economic Development Networks                                                 26
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Managing Effective Economic Development Networks                                            27
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Managing Effective Economic Development Networks                                          28
                                                                      Appendix A.
                                                        All Responses to Survey Questions

                                                  County 1                             County 2                            County 3

                                          City   City    Co.            City   City   City   City   Co.            City   City   Co.
                                          1A     1B       1    Median   2A     2B     2C     2D      2    Median   3A     3B      3    Median
Survey Question
1. How well has this 28E agreement
been able to achieve its stated
objectives?                                2      3      1       2       2      1      3      2             2      3.5     3     4      3.5
2. How well has this 28E agreement
been able to increase the efficiency of
providing this public service?             2             1      1.5      2      1      3      2      3      2       4      2     4       4
3. How well has this 28E agreement
been able to increase the effectiveness
of providing this public service?          1      3      1       1       2      1      3      2     3.5     2       3      3     4       3
4. How would you rate the sharing of
costs associated with this agreement?      2      5      1       2       3      4      3      3             3       5      4     5       5
5. How would you rate the sharing of
benefits associated with this
agreement?                                 4      5      3       4       3      1      4      2            2.5     3.5     4     5       4

Questions 1-3
SCALE OF 0--4
0=NOT AT ALL
2=SOMEWHAT
4=VERY WELL

Questions 4-5
SCALE OF 1--5
1=VERY INEQUITABLE
5=VERY EQUITABLE



Managing Effective Economic Development Networks                                                    29