Building Economically Viable Communities: A Role for Community Developers

Abstract

This paper uses three fundamental elements of economic theory to explain the options available to localities that want to alter their economic destiny. The three elements are demand, supply, and institutional forces. An understanding of these forces will increase a community developer's ability to work with community residents attempting to manipulate these same forces to their community's advantage. Demand forces relate to external (export) and internal (consumer) markets. Supply forces incorporate the access to and mobility of capital, labor, and technology for use by the community to produce the economic output desired Institutional forces represent the "rules of the economic game" and the decision-making capacity of the community. Both are subject to local manipulation but are too often the forgotten elements of a comprehensive community economic development strategy. These elements operate within a context of preconditions or values that influence the extent to which the community chooses to exercise its options. While an understanding of demand and supply forces is a necessity, the involvement of community developers in the institutional component is often the critical difference.