Jim.
What is the theory on economic development, what is the definition of economic development?
I liked the description in the latest LO, 'urban studies monkey'. Dr. Puck is a pleasant misnomer too. Well, monkey at the least...
I can only frame your question unconventionally while being mindful that "urban development" is generic and so there isn't any single theory that supports its definition or makes it particularly an instrumental (i.e. for the sake of,) term.
At a commonsense level, to develop anything in an urban space is to suppose that there are specific suppositions which underlie the actual favorable benefits to the developer.
There's a continuum one can use to frame this broadly.
If an entrepreneur opens a mom and pop store, at the lowest level, this kind of developer may be supposing the new store will return to them profits that will support their immediate livelihood. We might suppose that the entrepreneur lives in the community and, if so, this investment is ramified to include further investment in supporting their livelihood in the community.
If an entrepreneur opens a store and this store is part of a portfolio of profit centers, (so-to-speak,) then we can also learn whether the portfolio includes other sites in a specific community, or includes sites spread over a number of communities. If this same entrepreneur lives in the community, in either the case of a wholly local portfolio or otherwise, their investment is probably ramified differently because they live in the community.
(A good example, often, of portfolios being wholly local, are found in entrepreneurs who own real estate in a community. It is also often the case that a real estate portfolio is owned by someone who doesn't live in the community, and, the portfolio is dispersed over many communities.)
Again, if we extend the complexity of local investments along a continuum, we'll arrive at 'entrepreneurs' who invest in local profit centers but hold regional or national scale portfolios. As far as I know, and I could well be incorrect, prominent developers at this end of the continuum do not live in Lakewood. (Jacobs? What private developer, who lives here, is the most locally invested?)
Then there are more complicated plays. In such plays various parties work together to develop buildings or tracts or blocks or neighborhoods (!). When these plays are said to be 'vertical' then property owner, rentier, entrepreneur, banker, broker, contractor may all work together and bundle their self-interests together, as it were; attempt to characterize complicated and diverse returns on mutually aggregated investments.
In mixed use plays developers, financiers, entrepreneurs, renters, householders, consumers (etc.) may all figure in as potential revenue centers in a complicated development proposal/project.
This is, of course, just one way to look at development. Folds in extant or projected infrastructure, the complexities of financing, the legal and regulatory environment, and, the civic/community interests into this mix, and every development concept at each point on the presumed continuum is, to some extent, complex.
The good thing about looking at it economically is that it is very concrete.
(Whereas my personal preference is to make it hideously complicated by adding to this concrete perspective the much more intangible and subjective factors having to do with social psychology, cultural effects, affectual ecology, sustainability, and, in general, figure in psychic overhead. This reduces to: most residents feeling in the aftermath of a development, happier, less anxious, more intelligent, more connected, more prosperous, more confidant, etc.)
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One way to look at the theoretical underpinning is to comprehend that certain factors have to be in sympathy to provide the developer or entrepreneur with return on their investment. "Synergy" is an evocative concept too. For example, there's reason to suspect that Lakewood wouldn't allow a sustainable return on a half-million dollar bookstore investment, and Lakewood doesn't need another saloon, yet, the right new saloon might be very profitable.
A good rule of thumb with respect to any inquiry into a given development proposal is to, "follow the gold".
Given a project proposal, where do cash flows and profits end up? Even in the smallest scale entreprenurial project, the investment and revenue monies go to different locations. For example, tax monies go to the city, state, and feds. Loan payments go to local or other banks, then flow elsewhere. Revenues go first to the entrepreneurt but then quickly get dispersed to vendors, employees, etc..
Some of this money stays in the community, some does not.
Any developer should have a somewhat workable model of what is assumed to be the ramification of presumptive cash flows. If not, ask 'em.
It's very much worth noting that every adult has to pay bills and so at the level of the renter or householder there is something like a 'personal' entrepreneurial model. One could plot in and out flow there. It's deceptively complex; our individual earnings represent returns on our individual investments in time, career, job, eductation, etc.
On this very tangible level, a community constitutes, economically expressed, a web of entangled entrepreneurial models. In this respect, synergy means sympathy between the developer's wish for a return AND the consumer's (etc.) wish for a return. Where the presumed match doesn't happen, businesses go out of business as can also, in effect, individuals.
It's important to comprehend that an economic development of anything is a kind of 'bet' on future conditions. There's a risk management feature implicated. Also, since Lakewood or any other community isn't an isolated location, many development projects assume that many of these factors connect up to other communities.
Lakewood sends more workers to work outside of Lakewood than work in Lakewood. This is a good example of how Lakewood residents are intimately entangled in development elsewhere.
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The Dollar tree is a good case of a development coming onto the radar screen pretty much after the doors are open. If we use the continuum to typify various scales of development, we could suppose that developments which are complicated, and occupy some spot on the continuum of development, will usually land on the radar screen at some point in their development cycle 'before the doors open'.
In our increasingly transparent and open source paradigm, oriented around civic capacity and intelligence, what may be needed are 'development trackers' who can navigate the trail of future developers.
I mention this because there is a kind of coldly calculating development ethic which takes a kind of mechanical 'birds-eye' view of return-on-investment opportunities 'down below' and they can be expert at moving projects forward off the radar screen.
The question begged gets at an important idea: how much should a community collectively work on behalf of its own interests against the individualistic ethos that, in some cases, is not very concerned with anything like 'community self-interest'.
I raise this because there exist different sensings of what is in the greater community interest, and, because this happens to be always true, the question of who gets to decide what is the optimal greatest self-interest, when granted as a factor in urban development, is, in many ways, the hardest question of all. It's certainly the question for which theoretical considerations become very knotty.