Introduction
Competition over economic development dominates the practice of local governance in the United States. While such competition can be positive for localities that are successful in attracting economic development, negatives exist for those localities that either lose economic development to other areas or cannot attract new opportunities. Such negatives often include long-term economic decline, population loss, and degradation of governance capacity. To help offset such negatives, collaborative governance has emerged as a viable framework for effective local governance. However, the challenge for many local governments is how to engage in such collaborations given losses in economic development and corresponding declines in governance capacity and public service delivery.
Like many major urban areas, the city of Detroit has experienced extremes in terms of economic development. Until the latter half of the 20th century, the city enjoyed significant increases in economic development that continually transformed the city: from a small outpost for fur trading in the 1700s, to a military center by the early 1800s, to an industrial area known for building railroad freight cars and ships in the 1850s, to a major international center for automobile manufacturing in the 1900s (Hyde, 2001). This evolution helped the city of Detroit, and its surrounding suburbs, to become one of the largest industrial manufacturing areas in the world by the 1940s. Reflecting this might, the city of Detroit was the first American city to submit an application to house the newly formed United Nations (Mires, 2013). While that application was ultimately not successful, by the end of the 1940s the city was arguably at the zenith of its economic power with a population of close to two million residents and a resilience that allowed it to weather the complexity of transforming its industrial base from military production focused on the war effort back to automotive production (Sugrue, 1996).
However, weaknesses to the city’s socioeconomic resilience were already starting to manifest. In 1943, the city experienced a significant race riot that reflected long-standing racial tensions within the city. Federal troops had to eventually be called to end the three-day riot that ultimately killed 34 individuals, injured 433 individuals, destroyed approximately $2 million in property, and wasted one million industrial production hours that could have been devoted to the war effort (Capeci & Wilkerson, 1990). The 1943 riot exposed the most significant weakness in the city during this time: a population divided by race, class, and culture.
Weaknesses within the city’s economic base also manifested from the 1950s to the 1960s. While this decade is generally seen as the golden age of Detroit and the surrounding automobile industry, a closer inspection of history reveals a more complex reality. From 1949 to 1960, the United States experienced four significant economic recessions (specifically in 1949, 1953, 1958, and 1960). When considered in relation to the national economy, these recessions are often remembered as relatively minor events (Friedman & Schwartz, 1963). However, these recessions caused significant challenges for Detroit’s automobile industry as their quick and unexpected nature made predicting the demand for automobiles nearly impossible given traditional modes of production. Consequently, as early as the 1950s, the city’s industrial base of automobile manufacturing started to transform by implementing more agile production techniques and relocating factories outside of the city and the state of Michigan in order to maximize cost savings (Sugrue, 1996). As a result, between 1950 and 1960 the total number of blue-collar jobs within the city began to decline (Farley, Danziger, & Holzer, 2000). These trends, along with federal funding for the construction of new interstate highways and the social phenomena of “white flight,” accelerated suburbanization around the nation and especially in the city of Detroit (Jackson, 1987; Thompson & Mahu, 2017). By the late 1960s, factors such as a lack of economic opportunity, discriminatory housing policies, and negative relationships between police and minority populations, especially the Black population, helped influence Detroit’s race riot of 1967 (Herman, 2005). This riot, among the most destructive riots in the history of American urban areas, lasted five days, killed 43 individuals, injured 189 individuals, and caused over $75 million in property damage (Fine, 1989).
The impact of the 1967 riot on migration and economic development was significant. It accelerated Detroit’s existing trends of outward migration and deindustrialization during the 1970s and beyond (Farley et al., 2000). Perhaps more than any event of its time, the 1967 riot fundamentally changed people’s perception of the city of Detroit. The city was now the poster-child of urban decay and failure, whereas previously it was viewed as a hub of automobile and manufacturing innovation. Throughout the 1970s and 1980s, the city tried to reinvent itself and small successes often occurred. For example, in 1977 the Renaissance Center in the city of Detroit opened and hosted the 1980 Republican National Convention. But small successes could not stop the major long-term trends of decline. By the 2010s, the city’s population had declined to approximately 700,000 residents and the number of manufacturing jobs in the city was barely over 25,000 (in 1947 the city had over 330,000 such jobs) (Thompson & Mahu, 2017). In addition, by the 2010s, the city had over 80,000 abandoned residential properties (Detroit Future City, 2012). The effects of such long-term economic decline coalesced in 2013 when the governor of Michigan placed the city under the control of a state appointed emergency financial manager, essentially ending local control of the city (Thomson, 2017). Quickly thereafter, the city entered municipal bankruptcy.
In many ways, entering municipal bankruptcy marked a turning-point for the city. In the municipal bankruptcy process, the city was eventually able to remove its state appointed emergency financial manager, reduce its long-term financial liabilities, and secure additional revenues for economic redevelopment and improved service delivery from the state of Michigan as well as nonprofit organizations (Jacoby, 2016). Further, the city experienced an increase in the number of economic development projects, especially in its downtown center, after exiting the bankruptcy process (Bomey, 2016). While these developments were positive, the city still faced significant challenges especially in terms of governance capacity, particularly in the formation and implementation of collaborative economic development strategies.
Collaborative economic development in Detroit
Collaborative efforts now define the current reality of local governments across the United States, especially those local governments struggling with fiscal stress, declining governance capacity, or significant policy challenges (Emerson & Nabatchi, 2015). At a foundational level, such efforts can be included in two distinct, but related categories: collaborative governance regimes and regionalism initiatives. Collaborative governance regimes involve a diverse set of governmental and nongovernmental actors engaging in continued collaborations to help implement some type of public serving endeavor or to help solve a complex policy problem (Agranoff, 2007; Agranoff & McGuire, 2003; Emerson, Nabatchi, & Balogh, 2012). Related to such efforts are regionalism initiatives in which local governments formally share services through interlocal agreements, share revenues as part of a fiscal arrangement, or even consolidate the structure of multiple governments into one single government to more effectively implement the operations of government (Chen & Thurmaier, 2009; Miller, 2002). Both collaborative governance regimes and regionalism initiatives involve a network of governmental organizations working outside their traditional boundaries. However, regionalism initiatives are generally viewed as being constrained to governments and their specific service deliveries while collaborative governance regimes involve a more diverse set of governance actors, including governments, nonprofit organizations, and private sector entities in the delivery of services.
Within either category, collaborative success depends on trust with more complex collaborations often building upon some type of existing relationship. These existing relationships help build the capacity for collaboration and often include basic agreements that allow knowledge sharing, repeated communications, and the eventual inculcation of shared values between different actors in a collaboration (Frederickson, 1999; Weber & Khademian, 2008a; Weber & Khademian, 2008b). In this way, preexisting cultural, political, organizational, and historical variables within a region can help build the ultimate social bonds that can make any type of collaborative endeavor successful (Andrew, 2009; Carr, LeRoux, & Shrestha, 2009; Feiock, Tao, & Johnson, 2004; LeRoux, Brandenburger, & Pandey, 2010; Thurmaier & Wood, 2002).
However, trust may be more difficult to achieve in regionalism initiatives rather than collaborative governance regimes. Achieving trust between local governments can be challenging as the history of local government emphasized the value of self-governance rather than collaborative approaches. Until relatively recently, most local governments in the United States did not possess a rich history of regional collaboration with other local governments. Interlocal agreements existed, but were not really widespread (Norris, 2001). Additionally, regional governments also existed, but were typically limited to a few cases of urban governments collaborating to implement complex policy projects (Teaford, 1979). Only with recent increases in the complexity of policy problems, mandates from national and state governments, and retrenchment in the budgets of many local governments has regional collaboration been embraced by more and more local governments (Miller & Cox, 2014). And even with those more recent trends, perceptions of competition rather than collaboration often dominate the theoretical justification for different types of local governments (Tiebout, 1956) and local perceptions of economic development (Johnson & Neiman, 2004).
For example, the “Tiebout Hypothesis of Local Government” shows the benefit of local governments competing with one another for residents. Viewed through the prism of public choice economics and utility maximization, the Tiebout Model theorizes that optimal service provisions from local governments will more likely occur from competition between local governments. With a marketplace of local governments providing services, residents can migrate to the jurisdiction that maximizes their perceptions of utility (Tiebout, 1956). Additionally, such a marketplace makes governmental services more efficient and effective as the pressure of competition forces all local governments to offer public services that are both low in price and high in quality in order to attract the most residents (Ostrom, Tiebout, & Warren, 1961).
Like much of the United States in the latter half of the 20th century, such ideas of competition, rather than collaboration, were dominant in the Detroit metropolitan area. Driven by suburbanization and social factors like “white flight,” much of the white population of Detroit fled the city to the surrounding suburbs (Darden, Hill, Thomas, & Thomas, 1987). Essentially, the Detroit metropolitan area became divided by race, class, and income. This in turn, seemingly made trust-building between network actors in Detroit and the suburban governments more difficult. Such divisions had definite impacts on economic development in the region with collaborative networks weaker for policies like economic development (Leroux & Carr, 2010).
For example, in the 1970s the suburb of Pontiac, Michigan was able to lure sports teams such as the Detroit Lions in football and the Detroit Pistons in basketball away from the city of Detroit by building the publicly funded Pontiac Silverdome. Located approximately 30 miles from the city of Detroit, the Pontiac Silverdome also hosted a variety of cultural attractions such as music concerts, entertainment festivals, and even religious events such as a major Catholic Mass for 100,000 people held by Pope John Paul II in 1987 (Broda, 2017). However, since many local governments viewed (and continue to view) sports teams as a type of economic development opportunity, competition for these sports assets increased. By the late 1980s the neighboring suburb of Auburn Hills, Michigan attracted the Detroit Pistons from the Silverdome with a different, privately funded arena in Auburn Hills (i.e., the Palace of Auburn Hills) and by the early 2000s the city of Detroit was able to induce the Lions back to Detroit with another publicly funded stadium (i.e., Ford Field). While the actual economic impact of sports teams on local economies remains in doubt (Aaron, 2008; Groothuis, Johnson, & Whitehead, 2004), they showcase the local competition for economic development that pervaded the Detroit metropolitan region.
The lack of collaborative opportunities regarding economic development between local governments in the Detroit metropolitan region had significant implications for Detroit. With less opportu...
