COMPETITION AND COOPERATION IN ECONOMIC DEVELOPMENT: EXAMINING THE PERCEPTIONS OF PRACTITIONERS IN ONTARIO, CANADA

COMPETITION AND COOPERATION IN ECONOMICDEVELOPMENT: EXAMINING THE PERCEPTIONS

OF PRACTITIONERS IN ONTARIO, CANADA

GODWIN ARKUThe University of Western Ontario

ABSTRACT: This article reports on a study that explored economic development practitioners’ per-ceptions of competition and cooperation in economic development. The study was conducted against thebackdrop of (1) an increasing advocacy by scholars and policymakers for cooperative policy practicesin economic development instead of competition and (2) the restrictive institutional environment withinwhich practitioners operate in Ontario. The analysis in the paper is based on in-depth interviews witheighteen economic development directors from a wide range of communities in the province of Ontario,Canada. Findings indicate that practitioners had a strong positive view of regional approaches in thepresent global economy. These findings contrast sharply with prior studies suggesting that practitionersare unwilling to cooperate in regional economic development. The study offers several possible reasonsfor a change in thinking. Practitioners also supported restricting financial incentives to businesses inOntario, arguing that restrictions provide a more even environment for economic development activi-ties in the province. Interestingly, practitioners’ support appears to contradict doubts about the globalcompetitiveness of Ontario communities in such a restrictive environment. In light of practitioners’positive cooperative attitudes, study findings suggest areas for policy interventions to enhance practicalcooperative policy making.

Economic development officials are charged with initiating programs that enhance the material andsocial well-being of their communities. To accomplish this task, officials strive to attract and retaineconomic enterprises to promote the economic and fiscal health of their communities and to improvethe tax base, which local governments rely on heavily to provide municipal services. Private capitalis limited. Capital is also increasingly mobile, due to rapid technological changes, competitionfrom unexpected places, and market fragmentation. Although cities have traditionally competedwith each other for economic development, this competition has intensified in recent years due toglobal changes (Morin & Hanley, 2004). Scholars and commentators have debated the consequencesof competition among communities, arguing that competition is inefficient and creates inequities(Goetz & Kayser, 1993; Grady, 1987; Wolfson & Frisken, 2000). Thus, some scholars have calledfor cooperative efforts to solve problems (Agranoff & McGuire, 2003; Blakely & Leigh, 2010;Gordon, 2009; Jansen, 1994; McGuire, 2000; Wolfson & Frisken, 2000; Wolfe & Creutzberger,2003). Recent evidence suggests that some communities are beginning to understand the benefits ofcooperation and are becoming more willing to participate in regional economic development efforts(see Gordon, 2007, 2009; Arku, 2013).

Most research on municipal competition and cooperation was conducted in the United States anda handful of European countries. Relatively less is known about countries such as Canada, where

Direct correspondence to: Godwin Arku, The University of Western Ontario, Department of Geography, London, ON, CanadaN6A 5C2. E-mail: [email protected]

JOURNAL OF URBAN AFFAIRS, Volume 36, Number 1, pages 99–118.Copyright C© 2012 Urban Affairs AssociationAll rights of reproduction in any form reserved.ISSN: 0735-2166. DOI: 10.1111/j.1467-9906.2012.00647.x

100 II JOURNAL OF URBAN AFFAIRS II Vol. 36/No. 1/2014

municipalities generally operate in a different institutional climate. In Canada, municipalities are thecreatures of provincial governments and are, therefore, restricted in ways to promote their economies(see Gertler, 1990; Graham, Phillips, & Maslove, 1998; Kitchen, 1985; Reese & Rosenfeld, 2004;Reese, 2006; Tassonyi, 2005; Wolfson & Frisken, 2000). The strict restrictions are meant not onlyto avert costly financial bailouts or financial collapse of municipalities but also to prevent abusesand inequities from unregulated use of municipalities’ financial incentives (Gertler, 1990; Graham,Phillips, & Maslove, 1998). More critically, policymakers assume that strict financial restrictionswill enhance cooperation among municipalities and avoid intense competition.

What is not known is how practitioners perceive competition and cooperation for local economicdevelopment in such a constrained environment or within the changing global environment, in whichregional economic development is regarded as the way to attract investments and promote growth.Moreover, in Ontario, since the late 1990s, financial responsibilities have been gradually downgradedfrom upper levels of governments to municipalities (Sancton, 2000). This has caused some scholarsto predict an increase in competition among municipalities because these urban communities wantto attract more private enterprises to enhance their tax base (Wolfson & Frisken, 2000). No studyhas empirically examined the extent of competition as opposed to cooperation since the municipalenvironment began changing in Ontario.

This study responds to this gap by examining the perceptions of economic development officialsin Ontario regarding competition and cooperation. The perceptions of those persons tasked to initiateand implement economic development programs are critical. This paper, therefore, contributes to anunderstanding of the topic in a specific region where the institutional context is, in some respects,designed to promote cooperation.

COMPETITION VERSUS COOPERATION: AN OVERVIEW OF THE ARGUMENTS

Over the years, academics, policy makers, and commentators have given considerable attention tothe topic of competition versus cooperation in economic development (see Bowman, 1988; Bradshaw,2000; Goetz & Kayser, 1993; Gordon, 2007, 2009; Grady, 1987; Wells, 1990; Wolfe & Creutzberger,2003; Wolfson & Frisken, 2000). To provide a context for the present research, the informationhere provides a brief overview of the main arguments found in the existing literature on economicdevelopment.

Studies have debated the utility or futility of competition and cooperation in economic developmentefforts (Jansen, 1994; Korsching, Borich, & Stewart, 1992; Wells, 1990). This issue has garneredmore interest because of the economic uncertainty and the economic order that has characterizedthe emerging global economy in recent years. As part of this new economic order, cities are forcedto compete internationally for investments to counter industrial declines and rising unemploymentrates. Competition for investment is not a new phenomenon. Cities have traditionally competedamong themselves for economic development, and practitioners have typically regarded economicdevelopment as a competitive task (Gordon, 2007, p. 60). To improve the economic and fiscal healthof their communities, states and localities compete to recruit or retain firms and spend hundreds ofmillions of public dollars annually on a variety of tax incentives and spending programs (Buss, 2001;Forman, 1997; Grady, 1987; Hanson, 1993; Schweke, Rist, & Dabson, 1994).

Among other benefits, competition is thought to generate innovation in an urban economy, toensure local control, and to enhance local and state governmental efficiency. However, competitionamong communities has attracted intense scrutiny and criticism. Some scholars believe competitioncreates inefficiency and inequities (Goetz & Kayser, 1993), and others argue that it distracts policymakers from promoting a regional economy (Wolfson & Frisken, 2000). The latter argument isconsidered particularly valid within a changing global economy. Some scholars believe that thecurrent global economy requires communities to operate as a group. Thus, instead of competition,local governments have been urged to cooperate in economic development policies and projects (e.g.,Blakely & Leigh, 2010; Gordon, 2009; Jansen, 1994; Korsching, Borich, & Stewart, 1992; Lackey,Freshwater, & Rupasingha, 2002; Leibovitz, 2003; Wells, 1990; Wolfson & Frisken, 2000).

II Competition and Cooperation in Economic Development II 101

Some authors believe that cooperation, among other advantages, provides a better mechanismfor local governments to access the external economy, increase decision-making capacity, enhanceresource capacity, achieve greater external economies of scale, improve market strengths, ensurecost effectiveness, and gain greater political influence through strength in numbers. Given theseadvantages, benefits of cooperation extend beyond an individual economy to multiple communities.Thus, proponents have urged communities to remove barriers to cooperative efforts and to forgepartnerships for mutual benefits. Such community partnerships may be particularly critical forsmaller communities because these localities lack resources and are not sufficiently attractive tooperate effectively in the emerging global economy. In short, cooperation among communities foreconomic development is an important mechanism for improving the economic and social well-being of communities. Recent empirical studies on cooperation have shown that these arguments areresonating well with some community practitioners and that practitioners are willing to engage incooperative regional economic development efforts (Gordon 2007, 2009; Nelles, 2005).

Although the benefits of cooperation are generally understood, various obstacles impede cooper-ative efforts among communities, including mismatches between goals and fiscal capabilities, lackof public demand for local cooperation, mistrust and suspicion of neighboring communities, andthe inability of cooperative efforts to generate quick and visible results (Cigler, 1994; Dewar, 1998;Leibovitz, 2003). Other frequently mentioned impediments include the culture of individualism, in-dividual competitiveness, different expectations among participating communities, a desire to retaina sense of community, unequal needs, unequal resources, unequal power among communities, andlocal politics (for discussion of these factors, see, e.g., Baker, 1992; Bradshaw, 2000; Cox & Wood,1994; Garkovich, 1992; Gordon, 2007, 2009; Lackey, Freshwater, & Rupasingha, 2002; Leibovitz,2003; Wolfson & Frisken, 2000). Solutions to overcome these impediments and, therefore, ensurecooperative efforts vary. Some scholars believe voluntary cooperative efforts will be more sustain-able and are more likely to yield results (Baker, 1992); others emphasize the need for active policy(Axelrod, 1984; Cigler, 1998).

Although existing research on competition and cooperation for local economic development iscomprehensive, most research comes from the United States and a few European countries. Less isknown about such countries as Canada, where the institutional climate within which municipalitiesoperate is generally different. Thus, the purpose of the present study was to address this gap byunderstanding the perceptions of officials who operate in such a context. The key question addressedis “What are practitioners’ perceptions about competition vis-a-vis cooperation in economic devel-opment?” Secondary questions are “How are practitioners’ perceptions played out in their economicdevelopment efforts?” and “What influence, if any, does the institutional context have on competitionand cooperation?”

INSTITUTIONAL CONTEXT FOR LOCAL ECONOMIC DEVELOPMENT IN ONTARIO

Municipalities in Canada are the creatures of provincial governments and are, therefore, subject toa broad range of legislative restraints that define their powers and limit their actions (see Gertler, 1990;O’Brien, 1976; Tindal & Tindal, 1979; Reese, 1992; Sancton, 2000). Legislative controls have been inplace for years and address, among other actions, all important financial decisions relating to taxing,charging, borrowing, and spending. Municipalities cannot engage in these decisions without explicitapproval from the provincial government (Bird & Slack, 1993; Graham, Phillips, & Maslove, 1998).The only real exception is municipalities’ ability to set property tax rates. Through these financialrestrictions, the provincial government exclusively determines the level of tax revenues available tothe municipalities (Tassonyi, 2005).

The field of economic development is similarly constrained (see Gertler, 1990; Kitchen, 1985;Reese, 1992, 2006; Wolfson & Frisken, 2000). The Municipal Act prohibits the municipalities fromgiving bonuses to private firms, a restriction that dates from 1888 (see Kitchen, 1985; Taylor, 1986).Subsequent Municipal Act amendments have established further controls on borrowing activity, cap-ital expenditures, budget procedures, and the conveyance of economic benefits to private businesses(Gertler, 1990; Reese, 1992; Tassonyi, 2005; Taylor, 1986).


Years of provincial control over municipal finances have produced the current situation, in whichall financial assistance, including bonuses or tax abatement, to industrial or commercial enterprisesis regulated. For instance, the Municipal Act 2001 specifically states that “A municipality is notpermitted, despite any Act, to assist any manufacturing business or other industrial or commercialenterprise, either directly or indirectly, through the granting of bonuses” (Ontario Municipal Act,2001). Specifically, municipalities are prohibited from (a) giving or lending any property of themunicipality, including money; (b) guaranteeing borrowing; (c) leasing or selling any property ofthe municipality below the fair market value; and (d) giving a total or partial exemption fromany levy, charge, or fee (106(2) of the Act). Municipalities may only offer incentives for suchactivities as heritage development, brownfield redevelopment, and other projects specified within acommunity development plan (Tassonyi, 2005). Municipalities may also waive development chargesfor businesses in certain areas of their jurisdiction (e.g., downtown) and provide serviced land at acompetitive market price.

The restrictions have profoundly affected the way municipalities pursue economic development.Gertler (1990, p. 43) argued that

such restrictive provincial statutes have important implications for the manner in which localgovernments fashion and pursue their own economic development strategies, since they are con-strained from engaging fully in the kind of competitive interjurisdictional bidding for economicactivity that American municipalities have developed.

In light of the restrictions, municipalities in Ontario have been compelled to find creative ways toenhance the economic growth and competitiveness of their jurisdictions (Gertler, 1990; Wolfson &Frisken, 2000). Policy reviews indicate that municipalities emphasize infrastructure investment tostimulate development, special events, site development, marketing policies (see Reese & Sands,2007), and lower tax rates on industrial and commercial properties than rates in nearby jurisdictions,among other strategies (Gertler, 1990). Municipalities have also begun to emphasize quality-of-lifestrategies to retain local businesses, to attract new investments, and to attract the labor force neededto compete in the global economic environment. Specific initiatives revolve around improving theenvironment, promoting culturally diverse communities, and investing in local amenities, amongother strategies.

Overall, the restrictive environment raises an important question related to competition and co-operation for local economic development: Does the restrictive environment enhance or hinderinter-jurisdictional competition and cooperation?

DATA COLLECTION AND METHODOLOGY

The data presented in the following sections are from Ontario, Canada’s most populous province.Ontario is home to 13 million of Canada’s 34 million inhabitants (Statistics Canada, 2011). Tra-ditionally, it is the manufacturing heartland of Canada and contributes between 45% and 50% ofthe country’s manufacturing GDP. Along with other places, Ontario has been forced to cope withthe challenges of significant economic restructuring and, in recent years, the global economic cri-sis. These challenges have affected the economic fortunes of most cities in Ontario (Hutton, 2010;Vinodrai, 2010; Bourne, Britton, & Leslie, 2011) and, therefore, their approaches to local economicdevelopment.

This study was based on qualitative analysis, which was appropriate for three reasons. First, andmost importantly, a qualitative approach helps a researcher explore a phenomenon with little priorbackground knowledge (Denzin & Lincoln, 2003). This is the case with competition and cooperationin Ontario, about which little is known. Second, this approach permits a researcher to use probingstrategies to collect in-depth information that other methods, such as a survey, might not provide(see also Gordon, 2009). In this study, the research objectives required a deep understanding of theissues. Third, a qualitative approach is useful when a researcher does not need to consider the degreeto which responses are representative of the population at large and does not need to seek “statistical


TABLE 1

Demographic Characteristics of Localities Involved in the In-Depth Interviews

2006 Unemployment Rate Updated Employment RatesName of Cities Population Size (Statistics Canada) (where available)

Small Size LocalitiesBelleville 49,454 6.5% 7.4% (2011)Collingwood 19,241 6.6% n/aElliot Lake 11,549 13.2% 15.1% (March 2011)Orillia 30,586 5.7% 7.35% (August 2011)Sarnia 72,366 7.4% 11.5 (March 2012)Wasaga Beach 17,537 7.3% n/a

Mid-Sized LocalitiesCambridge 120,370 5.9% n/aGuelph 121,688 5.3% 4.7% (August 2011)Kitchener 219,153 5.7% 7.3 (December 2010)Markham 301,709 6.7% n/aRichmond Hill 129,609 5.4% n/aSudbury 92,048 7.8% 6.3% (September 2011)Vaughan 192,068 4.7% n/aWaterloo 98,780 5.5% n/a

Large-Sized LocalitiesHamilton 519,949 6.5% 6.7% (September 2011)Mississauga 713,443 6.5% 8.5% (April 2011)Ottawa 883,391 5.9% 6.6% (2011)Toronto 2,615,060 7.6% 7.8% (2011)

Note: The most recent unemployment rates were compiled from various sources, including the communities’ websites. n/a = notavailable.

integrity.” In qualitative research, samples are not intended to be representative of the populationunder study because the goal is not generalization (Baxter & Eyles, 1997). Rather, respondents areselected to represent maximum variation across a range of factors (Quinn-Patton, 1990). This studyused qualitative information to understand competition and cooperation within the context of (1)a competitive and changing global environment and its associated municipal challenges and (2) astrict institutional control environment, where local governments are controlled by the provincialgovernment in all important fiscal respects.

Qualitative information was gathered from the most senior person within economic developmentdepartments in localities in Ontario (Table 1). Senior practitioners, namely directors, managers, andso forth, were selected for the in-depth interviews because of their experience, level of responsibility,position, and, perhaps more importantly, knowledge of the subject matter and familiarity witheconomic development issues (Table 2). One practitioner per locality was targeted, and eighteenin-depth interviews were completed. The collection of the current data began in 2009 and is part ofa larger study on economic development in a changing global economic environment. All localitieswith “cities” status (n = 49) were contacted for the interviews, as were ten (10) towns. The inclusionof selected towns was to obtain a different perspective on the topic under investigation. Of the59 contacts made, only eighteen (n = 18) accepted the invitation and participated in the in-depthinterviews. However, it is worthwhile to point out that the final list of localities that participated inthe study is diverse geographically, economically, and demographically. The list included the fourmajor cities and some of the important mid-sized cities in the province (Table 1). Five out of the 18practitioners (28%) were drawn from the Greater Toronto Area (GTA), the economic hub of Ontario.The GTA communities are the City of Toronto, Mississauga, Markham, Vaughan, and RichmondHill (see Table 1). Additionally, of the 18 localities, six are small-sized communities (<75,000population), nine are mid-sized communities (between 75,000 and 350,000 population), and four areconsidered large-sized communities (>350,000 population). These categories are based on Sands


TABLE 2

Summary Characteristics of the Practitioners

Interviewee Years of Experience withCode Position Title Gender Economic Development

1. Manager M Around 17 years2. Director M Little over 15 years3. Manager M 20 years4. Director M 15 years5. Director F More than 20 years6. Director M About 8 years7. Director F 21 years8. General Manager M 11 years9. Executive Director M 17 years

10. Business Development Officer M 12 years11. Eco. Development Officer F About 11 years12. Manager M 13 years13. Director F 12 years14. Manager M 13 years15. Manager F 14 years16. Eco. Development Officer About 15 years17. Manager M 2 years18. Director M 21 years

Note: The arrangement of participants is in no particular order.

and Reese’s (2008) classification scheme. Overall, the final list of communities that participated inthe interviews is a very good representation of the range of localities that exist in the province ofOntario.

Also, despite the fact that only 18 practitioners participated in the interviews, the point of saturationwas reached with this number, with no new information being obtained (see Charmaz, 2004).

As shown in Table 2, the practitioners who participated in the interviews had wide-rangingexperience in the field of economic development, extending from about 2 to over 21 years; theaverage working experience for the 18 practitioners was around 14 years. In terms of the recruitmentprocess, all directors received an introductory letter through email or a telephone call to determinetheir willingness to participate. Although the interviewees were not intended to be representative ofthe study sample, the final list of participating directors reflected varying lengths of service, divergenthistories, and widely diverse geography and locality sizes.

Data were collected through face-to-face, in-depth interviews. Interviews were conducted inparticipants’ offices and lasted between 45 minutes and an hour. The practitioners respondedto a series of semi-structured, open-ended questions from an interview checklist. This formatensured that the interviews did not stray from the research topics, and it allowed interviewersto probe for specific details and to add or remove questions as necessary (Denzin & Lincoln,2003).

The interviews focused on the key research objectives stated earlier and included some of thefollowing questions below, with the order of the questions varied according to participants’ responses(Quinn-Patton, 1990).

(1) What do you understand by competition and cooperation? Do you compete?(2) Where do communities see themselves in relation to other communities?(3) Do communities view as competitors those communities that are close geographically and have

a similar population size, or are there other factors that influence these perceptions?(4) Is there room for cooperation in a competitive environment and associated challenges?(5) What are the perceived benefits of cooperation?(6) What are the perceived obstacles to regional economic development efforts?


(7) What are the traditions and customs surrounding competition and cooperation that influencethese perceptions?

(8) What role, if any, has the strict institutional environment played on competition and cooperation?(9) What impact has increasing financial responsibility on municipalities had on competition?

(10) Are there examples in other policy or program areas of cooperative efforts between communitiesthat can be built upon?

Each interview was tape-recorded and transcribed verbatim. NVIVO software was then used toidentify themes and patterns in the data. Themes and constructs related to the primary researchobjectives guided the analysis. Key response categories were created prior to line-by-line coding,which is generally considered the most appropriate coding process (Strauss & Cobin, 1990). Thisinteractive and inductive process allowed the data to direct the development of themes. Transcriptswere coded according to the emerging themes and then reviewed by key categories several times toensure that concepts pertaining to the same phenomena were placed in the same category. The samecoding scheme was used for all interviews, which is the most effective way to compare responses.Finally, a number of strategies, such as using a comprehensive topic list, were employed to ensurethat data analysis was consistent (Krefting, 1991; Patton, 1987).

RESULTS

The findings are organized around the key objectives and the common themes that arose in theinterviews. Quotes throughout the results section illustrate key issues raised by the practitioners. In noparticular order, the interviewees were referred to throughout the results section by a code assignedto them; the numbers range from 1 to 18 (Table 2). As well, based on Sands and Reese’s (2008)classification scheme, participating communities are referenced as large, medium, and small to helpdistinguish some of the responses. Finally, this paper uses the following abbreviations to identifyparticipants and participating communities: PLC = Practitioner from Large-sized Community; PMC= Practitioner from Mid-sized Community; and PSC = Practitioner from Small-sized Community.

Competition: “Friendly” and Not “Fierce”

Participants generally noted that although some “sort” of competition exists, it is not the direct andaggressive competition previously reported in some U.S. areas (e.g., Guskind, 1990; Goetz & Kayser,1993; Hanson, 1993; Forman, 1997). In this study, the major theme from the in-depth interviewswas that competition in the province is generally “friendly” and subtle, as voiced by nearly allparticipants, irrespective of the size of community. To describe competition among municipalities,participants used such phrases as “friendly competition,” “normal competition,” “so-so competition,”and “minimal competition.” Many participants noted that “friendly” attitudes had been an intrinsicpart of their practices for many years but have become more prevalent in the uncertain global climate.

A practitioner from a mid-sized community noted that “we don’t take the position of we’recompeting against our neighbors. Competition is not helpful. We like to work with other cities onmutual projects and policies . . . ” (7, PMC). Other practitioners echoed this theme, with one noting,“We really don’t look at competition in the region very strongly. We prefer to feature benefits andpromote our community as a value proposition, as opposed to you shouldn’t locate in the city ofBurlington or Brampton or Toronto” (2, PLC). Indeed, some directors indicated that they celebrateeach other’s successes, especially following a major accomplishment. As recalled by a practitionerfrom a small community,

When Toyota announced in June 2005 to build a new $1.1 billion automobile assembly plant inthe City of Woodstock I called my colleague immediately after the announcement to congratulatehim. I gathered most of my other colleagues did the same thing. This is the kind of spirit we have,at least in this region . . . Our position is that we’re in together and we must work together andcelebrate each other’s successes (14, PSC).


Some practitioners noted that geographical boundaries are not major determining factors in theirdecision making, as illustrated by a respondent from a small community:

The only people who look at our boundaries are perhaps the local politicians. We practitionersdon’t. We look at economic development from a regional perspective (15, PSC).

Overall, practitioners’ approach to economic development seemed to be characterized by mutualrespect. They generally did not compete at the peril of their neighbors or, as one practitioner plainlystated, “We don’t stab each other” (11, PMC). Such sentiments were typical and repeatedly expressedby practitioners from all three sizes of communities.

Even though the practitioners admitted that “some sort” of competition exists, they attributed itto the nature of economic development, which is perceived as results-driven. However, the broadsentiment was that competition is generally subtle. Some of the practitioners believed that the“petty” competition that exists among communities in the province is “inherent,” “unavoidable,”and “hidden.” Many practitioners stressed that this is normal in the economic development process,or, as one stated, “bound to happen.” Another argued that “you cannot have a complete lack ofcompetition so far as you have individual cities . . . That would only happen if you have a countrywithout communities . . . that’s simply not realistic” (12, PMC).

Practitioners feel a sense of competition when prospective investors are looking for places ofinvestment and have contacted two or more communities. Even in those moments, the practitionersreiterated, they do not criticize each other; rather, they emphasize the advantages of their localeconomy to prospective investors. A practitioner from a community located within the GTA explainedthis, stating,

Yes in some sense we compete . . . we try to make our community the best environment for business.But we don’t go to City of Toronto or Ottawa and say to companies over there, you shouldn’t behere you should come to our community or tell prospective businesses that don’t go to such andsuch a community. We don’t do that because we believe that a strong Toronto is really beneficialfor all of us.

Another practitioner from a small-sized community expressed similar sentiments, noting,

We don’t ever in any of our dealings try to put down another community, ever, no matter what. Wemay compare utility rates or tax rates but it’s never with an eye toward you know, giving anothercommunity a black eye, absolutely not, that’s not what we do. We just present ourselves, what wehave to offer, the services we can provide, we always push the aftercare, like you know once youmake the decision to come here, that’s the beginning of the relationship with us, it’s not the end. Soyou know once you move here, depending on what you need you know, to get your shoes repairedor find a dry cleaner, you know we’re here to get you whatever you need. (13, PSC)

Practitioners outside the GTA indicated that they promoted their communities through conventionalmarketing strategies, such as promotional materials. They often relied on such mechanisms asnewspaper advertisements, especially in widely circulated print media outlets (e.g., the NationalPost, Toronto Star, Globe & Mail) and electronic media (e.g., YouTube) to extol the virtues of theireconomies. Those virtues often include lower industrial and commercial taxes and inexpensive and“shovel ready” land. Although such marketing strategies are likely to put communities in directcompetition with each other, the practitioners argued that their marketing efforts were not drivenby desire to undermine their counterparts; instead, they claimed their primary motivation was to beproactive in an uncertain and volatile global environment.

Competition Is “Global” and Not “Local”

A common theme among practitioners was that competition was a “global,” not “local,” issue.The practitioners were generally reluctant to describe their immediate geographical neighbors as


competitors, perhaps reinforcing their argument that competition in economic development effortswas a subtle issue within the province. The global theme was especially prevalent among practitionersfrom the large and mid-sized communities. In part, this reflected the resources and diversity of thoseeconomies. More importantly, this also reflected their desire to assume global-image status and to becompetitive internationally. For instance, a major aim of the City of Toronto, as stated in their 2008strategic document, was to position the community “as a leading global city of the 21st century”(City of Toronto, 2008, p. 5). Another example of this global view is the 2011–2015 economicdevelopment strategic document for the City of Kitchener, a mid-sized city, which states that the cityaims to position “its innovative businesses to compete on the global scale” (City of Kitchener, 2011,p. 4).

The global viewpoint was clearly reflected in practitioners’ perceptions about whom they regardedas their competitors. Throughout the interviews, the practitioners from large and mid-sized commu-nities referred to their competitors as being outside Canada, not their immediate neighbors. Forinstance, a practitioner in a mid-sized community stated that “our competitors are not really neigh-bors like Toronto, Kingston or Waterloo . . . it’s more with our southern counterparts [U.S. cities],Shanghai, Singapore, and so forth” (6, PMC). A practitioner from a large community reinforced thisidea when asked which localities were his greatest competitors, stating,

Our competition is over other locations in the world, there’s no doubt about it because of theinternet and a lot of other things businesses can operate almost anywhere and anytime dependingon what they are doing. We definitely feel our competitors are our global counterparts . . . as suchwe always try to position ourselves strongly to take advantage of any and every opportunity. (1,PLC)

Nonetheless, four of the six practitioners from small communities identified their geographicalneighbors as their competitors. This perspective may be explained by the fact that the scope andprograms of smaller communities are more locally and regionally focused than globally focused.Furthermore, these communities lack the resources and the size, as well as the social, cultural, andeconomic diversity, to compete nationally and internationally. Practitioners from these communitiesmentioned that the bulk of their efforts have been geared toward ensuring the growth of existingbusinesses rather than pursuing businesses located elsewhere.

Cooperation: Regional Cooperation Is “the Way for the Future”

The practitioners widely acclaimed the value of cooperative efforts, unlike the theme of compe-tition. Irrespective of the size of community, they claimed that cooperation was prevalent in theireconomic development in respective geographical regions of the province. The directors used suchphrases as “fairly common,” “exceptionally good,” “better appreciation of it,” and “increasinglybeing adopted” to describe the extent and importance of cooperation to their economic developmentefforts. In the words of a practitioner,

Cooperation in Ontario, particularly in the Greater Toronto Area and the Regional municipalityof Waterloo is exceptionally good, maybe to the point of a certain level of inaction or lack ofcompetitiveness. (12, PMC)

According to practitioners, they often adopted a common front when dealing with prospective for-eign investors: “There’s a greater level of sharing, collegiality, and common purpose with everybodywhen we’re outside of your domestic market . . . we typically act as a unit” (12, PMC).

The practitioners stated that cooperative efforts have specific advantages, including enhancinga larger regional economy, improving marketing strengths, pooling scarce resources, and ensuringcost-effectiveness (Table 3). The general feeling was that cooperation was necessary to market com-munities as a ‘region’ or as a community within the context of a larger area. This is especially critical


TABLE 3

Summary of Practitioners’ View About Advantages/Challenges of Cooperative Efforts

AdvantagesEnsures larger regional economyEffective way to respond to global competitionEffective mechanism to deal with global recessionSaves time and effortPermits sharing of knowledge and best practicesIncreases resource capacity of communitiesEnsures effective use of limited resourcesEnhances cost-effectivenessReduces tension among communitiesPermits the development of leadership skillsMore appealing to upper levels of governments

ChallengesManaging expectations among participating communities in cooperative projectsDuplication of efforts (i.e., when a community belongs to more than one cooperative project)Differences in economic development priorities among communitiesInability of cooperative efforts to generate quick tangible resultsBureaucracy

in the present competitive global market place. One practitioner described regional cooperation foreconomic development as “the way for the future” (3, PLC). Other typical comments include “if wepool our resources and feature the region as opposed to each of these individual cities, we find thatthere’s benefit. So we think it’s valuable to work on a regional basis that way” (9, PMC). Two otherpractitioners shared similar perspectives, as follows.

Cooperative efforts ensure mutual benefit. If a company locates in the City of Brampton orMarkham but they are from Japan there is a benefit to [our economy] as well . . . And if they locatein [our community] there is a benefit to Brampton and Toronto and other places because peoplewill shop and live and help the regional economy. (2, PLC)

I enjoy a lot of collegiality and cooperation with all levels of government and with my collegesacross municipalities. I don’t think I’m the only one, I think that’s really the tenure of what we’reall about, we’re in it together. If we can bring in a prospect and somebody lands it, we all win. (5,PSC)

A consistent theme throughout the interviews was that prospective investors preferred a regionaleconomy, as illustrated in the following response:

Potential investors prefer regional development effort. We definitely get a lot more attention as aregion and what we notice the most is how potential investors feel about dealing with the regionas opposed to the individual municipalities. They like it a whole lot more. (15, PSC)

The practitioners indicated that regional economic development coordination makes tremendoussense and broadly agreed that they had overcome the focus on individual efforts that previouslycharacterized their strategies. A practitioner from the GTA bluntly noted, “The days of the cityabove Toronto were short-lived and over” (11, PMC). This practitioner was referring to a negativecampaign in the 1990s by the City of Vaughan, a municipality within the GTA, to attract newbusinesses from other parts of the wider metropolitan region. Practitioners generally believed thatattitudes had changed about involvement and commitment toward regional economic developmentcoordination over the past decade, due, in part, to the changes within the global economy and efforts bytop government officials to push for common regional strategies. Although support for cooperativeefforts was nearly unanimous among participants from communities of all sizes, it was strongestamong practitioners from medium and small communities. Practitioners in those communities felt


they were insignificant on their own. However, as they partnered with neighboring municipalities toform a “region,” their population base, physical area, and regional services increased, making thema more attractive place for investments; that is, they saw tremendous advantage in working togetheras a region.

The practitioners argued that joint marketing efforts within a region are very effective for attractinginvestments. Joint efforts reduce the overall cost and increase the capacity of marketing and business-attraction activities. Practitioners from communities involved in regional partnerships indicatedthat attraction activities could happen more frequently and on a much larger scale because eachmunicipality or region provided a fair share of the partnerships’ budget. For instance, instead of CityA having a $10,000 budget to travel to trade shows and to travel globally to market the city, City Acan draw on a budget of $50,000 with four partner cities to market the larger region. Not only can CityA partake in more business attraction activities due to cost savings but it also has a larger regionalbrand to display the strengths of the entire region to prospective external investors. Typically, onlyone representative from the partnering communities would attend a trade show, leaving more timefor the other communities to focus on economic development activities at home. Leads from suchevents are shared with all other members of the partnership, though each participating community isresponsible for extolling the virtues of its economy to prospective businesses.

At the time of the interview, 15 of the 18 practitioners mentioned that their communities wereinvolved in one or more cooperative initiatives. Cooperative efforts often take two broad forms: sec-toral and regional cooperation. Sectoral cooperation is typically an informal arrangement based on aspecific sector or project (e.g., information and communication technologies [ICT], biotechnology,energy) that may or may not involve communities in close geographical proximity. One prominentcollaborative arrangement that was mentioned is the Ontario Technology Corridor (OTC)—a part-nership among the regions of Toronto, Ottawa, Waterloo, London, and Niagara. The OTC aims topromote the strength of the region to the external economy as a leading high-tech center.

Regional cooperation usually occurs among geographically close communities over a broad rangeof economic development issues. One popular mechanism for cooperative efforts is a commonregional institution, such as an economic development organization. Typically, these organizationsare designed to facilitate dialogue among stakeholders and to help build a regional identity. Moreimportantly, they are tasked with marketing the region to the global economy, with the goal ofattracting new businesses, investments, and mobile talents. Regional organizations also serve asbusiness network facilitators. One of the most lauded examples in the province is the CanadaTechnology Triangle (CTT), an organization established by the tri-cities of Waterloo, Kitchener,and Cambridge, along with some neighboring townships. CTT and other regional organizationsmentioned in the interviews play key roles in cooperative efforts in the province. Another exampleis the Greater Toronto Marketing Alliance (GTMA)—an organization that consists of the economicdevelopment organizations in the regions of Peel, York, Durham, and the City of Toronto. Each of theparticipating members contributes about $100,000 a year to market the entire region to the externaleconomy. Other practitioners identified specific cooperative initiatives involving oil sands projectsand export programs (e.g., pan-Northern export).

Obstacles to Cooperative Efforts

Although local governments have been consistently urged to adopt cooperative economic develop-ment policies and participate in cooperative economic development projects, studies have identifiedconsiderable challenges to such efforts (see Cigler, 1994; Dewar, 1998; Bradshaw, 2000; Wolfson &Frisken, 2000; Leibovitz, 2003; Nelles, 2005; Gordon, 2007, 2009). Nearly all participants indi-cated that they did not have such challenges as mistrust, suspicion, or resentment. Instead, somepractitioners mentioned that their challenges were managing expectations of participating communi-ties, mitigating duplicated efforts, bureaucracy, and differences in economic development prioritiesamong communities (Table 3).


The challenge of managing expectations was mentioned primarily by practitioners from commu-nities that had entered into formal agreements to establish common regional economic developmentorganizations. Each participating community typically wanted to see some dividend from their finan-cial commitment to the organization, as reflected by a practitioner from a large city: “We often hearat our board meetings complaints such as . . . ‘only 2 companies located in my community’, I’m nothappy about that” (2, PLC). Another large-city practitioner, whose community was part of a regionalmarketing organization, commented that “some municipalities question the benefit they get from theorganization. It’s a bit of a challenge to show visible benefit to each community at all times” (4,PLC).

Some practitioners also expressed concern about the duplication of efforts by regional developmentorganizations and individual cities. The directors with this concern indicated they overcame it bymandating that regional organizations pursue functions distinct from those undertaken by individualcities. For instance, in the Regional Municipality of Waterloo, CTT has a clear mandate to attractinvestments from the international economy, and the individual departments within the communitygovernment focus on retaining and expanding existing businesses and ensuring organic growth.

Effects of Institutional Climate

Municipalities in Ontario are subject to a broad range of legislative constraints that define theirpowers and limit their freedom of actions, including within the field of economic development. Theextent and level of constraints have raised questions (Gertler, 1990; Tassonyi, 2005). Key issuesare whether municipalities are too restrained and whether the environment puts them in a lesscompetitive position. In response to these issues, the present study sought to explore economicdevelopment practitioners’ perspectives on what role the strict institutional environment played intheir competitive or cooperative efforts and their perceptions of the framework within which theirfunctions were carried out.

Nearly all the practitioners interviewed believed that the restrictive environment affected theirapproaches to economic development and the strategies they employed, noting that the environmentreduced the type of rivalry reported in U.S. communities. They made similar responses regardingthis: “it limits unnecessary competition,” “it lessens intense rivalry,” and “it reduces fierce competi-tion.” Furthermore, within the restrictive environment, the practitioners were normally upfront withprospective clients, as reflected in the following comment.

We don’t play any games at all, obviously by law we’re prohibited from bonusing, all kinds of taxbreaks and things, we make that clear up front and you know if they short list us off the list justbecause of that so be it. (15, PSC)

In contrast to the consistent responses about the impact of the restrictive environment on com-petition, practitioners were ambivalent about its effects on cooperation among communities in theprovince. One participant noted, “I’m not exactly sure if the system here in Ontario has made anyimpact on our attitude toward cooperation. Maybe yes. Maybe not. I don’t know . . . Frankly that isa very good question, and I don’t know the answer” (8, PMC). Most participants expressed similaruncertainty. The uncertainty may be due to the fact that practitioners had not had experience with anunrestricted environment, and, given the fact that economic development is inherently competitive,they were not sure of how an unrestricted environment would have impacted their practices in theprovince.

In spite of this uncertainty, nearly all practitioners expressed positive views about the institutionalframework as it relates to restrictions on financial incentives to businesses. One major differenceamong the communities was that positive views about the restricted institutional environment weremore explicit and vocally expressed by mid- and small-sized communities than by the larger ones.For instance, a practitioner from a small community asked the rhetorical question,


Can a small town like us compete with Toronto? Or how can the Town of Tillsonburg competewith the City of Hamilton or Ottawa? (16, PSC)

Another practitioner from a mid-sized community observed that

Restriction ensures a level playing field for everybody. Of course, some would argue that we donot have the same amount of resources at our disposal like our counterparts in the U.S. but I believethere is positive to it. It prevents the kind of “bidding war” that is associated with an unregulatedsystem. Added to that it reduces inequities that unregulation may create. (7, PMC)

Practitioners from large communities supported the position of the mid- and small-sized commu-nities, as expressed below.

[A restrictive environment] is good for communities with limited resources. Sure I would loveto have $100m at my disposal to enable us to go after the companies we like . . . as happened inCity of Nashville some years ago. But broadly speaking economic development is not only aboutmoney. I believe a lot more has to do with devising the right policy framework. So personally Ibelieve the restrictive environment rather helps us to be creative with our policies. (4, PLC)

The above responses were typical, with the practitioners mostly positive about the economicdevelopment environment in Ontario. They admitted that the restrictions gave them a competitivedisadvantage. However, unlike the study by Reese (1992), none of the practitioners mentioned thatthey wished for the restrictions to be eliminated or relaxed. Indeed, practitioners from small and mid-sized communities explained that large communities have diverse economies and are more fiscallystable. As a result, they can provide a wider range of incentives and services to attract investmentthan can small communities. Thus, practitioners argued, the restrictive environment provided a moreeven ground within which economic development was carried out in the province.

Many practitioners also questioned the effectiveness of financial incentives as a whole, and somepractitioners argued that an unrestrictive environment could lead to a waste of resources and weakena municipality’s capacity to provide essential services. As one practitioner noted, “If there are norestrictions some communities will overextend themselves financially” (10, PMC). The restrictiveenvironment affected program and policy development. Some directors argued that the institutionalenvironment not only forced them to adopt a more focused approach but also compelled them to beinnovative in their programs and policies. As a participant from a mid-sized community explained,“the system has forced us to be on the edge . . . frequently trying new ideas and adopting differentapproaches to economic development” (18, PMC).

Along with the traditional infrastructure and land-based policies, the practitioners mentioned aseries of policies that were central to their economic development efforts. Investment in amenities andcultural activities to attract the emerging young labor force was high on their agenda. For instance,massive waterfront redevelopment with a waterfront trail in the City of Hamilton was seen as akey strategy to transform the city’s economy and make it attractive. Other policy areas that werecited included investments in skill training programs and innovation parks, and partnerships withuniversities and provincial government to enhance commercialization and innovation. There is a sensethat a good number of communities were embracing policies that were likely to prepare them forthe emerging economy, especially the larger communities and some mid-sized communities. Manypractitioners from mid-sized and small communities also mentioned the creation of public incubatorfacilities, which, they noted, had helped to spawn and nurture business start-ups and new ventures.

Overall, practitioners expressed satisfaction with the current institutional arrangement wherebyonly the upper levels of government have the constitutional authority to offer recruitment incentivesto attract companies to designated areas in the province. However, some participants were quick topoint out the issue of lobbying associated with the system, or, as one participant stated, “undergroundmaneuvering” (3, PLC).


TABLE 4

Summary of Ways Communities Try to Be Competitive

Level of emphasis

Type of strategies or issues being emphasized L M S

Creation of a good “business climate” (e.g., industrial service lands, lower developmentcharges—especially in downtown areas, lower property taxes, and so forth)

2 3 3

Investment in amenities and cultural activities to make themselves attractive to theemerging young labor force (e.g., waterfronts, walking trails, cultural festivals)

3 3 3

Emphasis on diversity (e.g., ethnic, cultural groups, etc.) 3 3 2Investment in incubator facilities 2 3 1Incentives for brownfield redevelopment 2 3 1Establishment of research and science parks—collaboration between industry and

universities3 2 1

Investment in communication infrastructure—especially by communities which are“geographically isolated”

1 2 3

Investment in people, labor force (fostering partnerships with universities) 3 3 1Regional partnerships—to ensure economics of scale 3 3 3Emphasis on success and diversity of businesses 2 3 2Ensuring less bureaucracy (e.g., taking measures to reduce development approval

processes)2 3 2

Extolling communities as “business friendly environment” 3 3 3

Ratings Legend: L = Large-sized towns, M = Medium-sized towns, S = Small-sized towns, 3 = Strongly emphasized, 2 =Moderately emphasized, 1 = Not emphasized.

Community Business Climate: How Do They Distinguish Themselves?

Because all communities are forced to operate under the same rules, a key question is how theymake their business climates attractive in order to compete. In other words, what differentiates citiesregarding attractiveness to investment and their ability to expand the commercial-industrial tax base?The practitioners indicated that they stay competitive by extolling the unique qualities of their com-munities, what one practitioner termed their “comparative advantages” (Table 4). The communitiesalso appear to compete with each other by pursuing quality-of-life strategies to attract the young,highly talented, and creative individuals, especially the larger and mid-sized communities. Also, be-cause of their external-oriented focused approach, strategies to enhance their general attractivenessappeared to be more prominent among large and mid-sized communities than among the smallerones.

Two comparative advantages mentioned primarily by communities outside the GTA were lowertaxes on commercial and industrial properties and available, inexpensive serviced land:

We see ourselves as a low cost municipality for business compared to the GTA from land chargerate to development charges, we are very competitive and have suitable locations for companies toreach out to the market. It is not that far, wherever you are going from [our community]. Also, wetend to have various industrial serviced lands at competitive prices and our development chargesthat are lower compared to the GTA. (7, PMC)

Other practitioners extolled the diversity of their economy:

I think it is the success and diversity of our economy and our businesses. It is as a result of the sortof companies that we have that others would want to locate in the area. (2, PLC)

Yet another practitioner praised the quality of the workforce:

I think what really makes us competitive as a city is our people, our labor force. It is the talentside that makes us competitive. That is one of the reasons why we are now actively pursuing


partnerships with universities and educational institutions and connecting with the provincialnetwork for commercialization and innovation. (8, PMC)

The practitioners enumerated various virtues with varying degrees of emphasis, depending onthe size of the community, including a friendly business environment, strengths of specific sectors,reputable educational institutions, support services for small businesses, training programs for busi-nesses and the workforce, easy access to major cities, low cost of living, and innovative spirit. Becausecommunities are allowed to use incentives for existing properties, some had aggressively pursuedthat option, most notably brownfield redevelopment. (For more detailed information on the overalltrends in economic development policies and programs in Ontario, see Reese & Sands, 2007.)

EFFECTS OF MUNICIPAL DOWNLOADING: NOT MUCH, BUT ECONOMICCONDITION IS A BIGGER CHALLENGE

Since the late 1990s, municipalities in Ontario have had to bear greater financial responsibilities dueto downloading of service delivery by upper levels of governments (Sancton, 2000). One assumptionis that increased financial responsibilities will spur municipalities to become more aggressive andcompetitive in their economic development efforts—with greater determination to boost their taxbase.

Overall, the practitioners admitted that increased downloading of financial responsibilities hadput severe strains on municipal budgets, thereby affecting the delivery of various forms of services.It was suggested that municipal governments are compelled to adopt neoliberal reforms and moreentrepreneurial approaches to deal with the budget constraints. In particular, additional sources ofrevenue are increasingly being pursued, including privatization of municipal services, collection ofspecial levies, and frequent increases in rates, such as property taxes; large and mid-sized communitiesparticularly appeared to be pursuing these measures to boost their revenue bases.

In terms of economic development efforts, nearly all practitioners felt that constraints in municipalbudgets were affecting their activities. It is worthwhile to point out that although municipal financialconstraints were attributed to the downloading of services, some of the practitioners were quick toattribute them to the volatile economic situation as well. Irrespective, they lamented that the lack ofsufficient money is adversely affecting their ability to undertake promotional activities (e.g., regulartrade missions, advertisement); provide adequate developable, serviced industrial land; and so forth.Although these practices are still core parts of their economic development efforts, the practitionersstrongly believed that sufficient funding would have made a tremendous difference in the way theycarried out these activities. One practitioner stated, “I’d love to have sustainable funding to implementall the projects we want . . . but money is simply not there. We’ve been very lean in our budget forsome time now” (17, PSC). Others made comments along the same lines, including the following:

. . . .with limited budgeting to go out and do promotional marketing, you know, if things weresuccessful it would be great if you had, say, a million dollars a year to go out and actually justspend it on brand and target marketing for the community because I think we’ve got so many greatareas to talk about but it’s very difficult to be able to show a short term payback on that. Not whenthe city is facing increasing financial constraint. (9, PMC)

Despite the municipalities’ greater responsibilities for services, the practitioners did not agree withthe assertion that the increase in responsibilities had intensified competition within the province.Statements such as “I don’t think it has had any influence,” “no direct impact,” “I wouldn’t say we’reany more competitive since the start of the downloading . . . ” typified their response when asked,“What impact has increasing financial responsibility on municipalities had on competition?” In fact,practitioners repeatedly emphasised that the uncertain global economy, frequent plant closures, andcompetition from unexpected places pose far greater challenges to their economic developmentefforts than downloading of services. As one practitioner explicitly stated,


Industries are relocating from my community every now and then. Guess what, they’re not relocat-ing to my neighbors but outside the country. Low cost countries . . . countries with cheap labor andweak environmental conditions. For me, frequent plant closures is my greatest challenge. Sure,municipal downloading is an issue, but I think we can weather the financial storm if we’re able tokeep our businesses here. (3, PLC)

Others reiterated similar themes, often pointing to the worsening economic conditions in theirjurisdiction, including rising unemployment rates, as a bigger challenge (Table 1). Thus, invariably,most of the practitioners discounted claims about likely increases in competition due to their greaterfinancial responsibilities. In general, the practitioners’ responses to this question reinforced theirearlier positions about competition being a “global,” and not a “local,” issue.

DISCUSSIONS AND CONCLUSION

This paper explored the perceptions of economic development practitioners in Ontario regard-ing competition and cooperation in economic development. Although the practitioners may havedemonstrated some ambiguity and unwillingness to cooperate in the past, interview findings suggestthat their perceptions have substantially changed. Consistent with previous findings (e.g., Goetz &Kayser, 1993; Wolfe & Creutzberger, 2003), interviewees perceived intense and fierce competitionto be inefficient and costly. In contrast, the practitioners had a positive perception of cooperationand argued that it produces various benefits, such as enhancing regional competitiveness, reducingduplication of efforts, and ensuring efficiency. Practitioners overwhelmingly agreed that regionalthinking in the present global economy is critical and “the way for the future.”

These perceptions contrast sharply with the previously reported unwillingness by local communi-ties to cooperate in regional economic development (e.g., see Wolfson & Frisken, 2000; Leibovitz,2003). The practitioners indicated that, in practice, they spent a lot of effort coordinating programsand activities, both formally and informally. The most notable cooperative actions were creatingcommon economic development organizations and engaging in joint marketing programs. Practi-tioners had a strong sense of mutual respect and tactfulness, as reflected by this comment: “We striveto maintain the integrity of our roles as economic developers” (6, MSC).

This mutual admiration was indicated by the absence of intense and fierce rivalry for economicdevelopment in the province. This contrasts with reported “bidding wars” and “under-hand dealings”in other jurisdictions (see Grady, 1987; Forman, 1997). Even so, communities are not withoutcompetitive attitudes in their actual practices. Indeed, the use of conventional marketing strategies,such as promotional materials that extol the virtues of individual communities, may appear toundermine claims made about the absence of a competitive spirit in the province. However, as thepractitioners pointed out, a complete lack of competition in economic development, especially insuch a geographically vast territory as Ontario, is improbable. Promotional campaigns are considerednormal practice. One practitioner described them as “bound to happen” but noted that competitivepractices were devoid of negative elements. Although “friendly competition” exists, practitionersgenerally argued that the decision about where businesses locate lies with the investors. One areawhere the communities appear to be competing involves the use of quality-of-life strategies to attractyoung, highly talented, and creative individuals.

Based on the interviews, several factors appeared to account for the evolving attitude towardregional thinking and noncompetitive behaviors among the practitioners. One important factor relatesto changes in the global economy, which practitioners argued played a key role in cooperative efforts.In the global economy, economic development efforts concentrate more on attracting investmentsfrom distant places than on engaging in intense neighborhood competition. Additionally, the uncertainand competitive nature of the global economy suggests that individual communities lack the resourcesand market characteristics to operate in isolation. The era when some communities could implementall their economic activities internally has virtually passed. Communities of all sizes must operate inthe world marketplace, making regional efforts critical for economic development.


Another significant factor relates to the transformation from a manufacturing economy to thepresent knowledge economy. Prior to the emergence of the new economy, communities largelyfocused their efforts on recruiting industries, which made cooperation difficult (see Aronoff &Vlasin, 1992). However, some economies have become specialized, with a focus on specific keystrengths, what is generally referred to as “niche marketing.” In other words, communities appearedto target specific sectors in their economic development efforts rather than to take the approach to“shoot anything that flies and claim anything that falls” (see Rubin, 1988). Within this framework,most practitioners indicated that what competition exists depended largely on the sector of emphasis.Finally, most practitioners interviewed indicated that much of their current focus centered on attemptsto retain, expand, and generate businesses within the local community rather than simply attractingbusinesses from elsewhere. This shift in emphasis, too, may account for reduced competition amongthe communities.

The key finding regarding the institutional environment is that the restrictive environment hasreduced the sort of rivalry reported in the United States. The practitioners were mostly supportive ofrestrictions on financial incentives. They argued that the restrictions provide a more even ground foreconomic development in the province. Interestingly, the practitioners’ support appears to contradictconcerns about whether Ontario communities can compete in such a restrictive environment andwhether they are too constrained (Gertler, 1990; Tassonyi, 2005). Practitioners agreed that therestrictive environment compelled them to be creative in their economic development efforts. Theextent of the restrictions also suggests that communities have to rely on conventional strategies, suchas lowering taxes on commercial and industrial properties and providing serviced land at competitiveprices. However, some scholars claim conventional strategies are inefficient and deprive communitiesof revenues needed to cover the costs of providing services (see Vojnovic, 2000). Indeed, the costsassociated with these strategies compared to direct financial assistance to business are open fordebate.

Overall, this study has contributed to a greater understanding of the perceptions of competition andcooperation—issues that have attracted considerable attention in recent years. Not only has the studyupdated existing research but also, and more importantly, it has provided perspectives on competitionand cooperation from a different institutional context. Using a series of in-depth interviews, the studydemonstrated that economic development practitioners had strong interests in regional cooperativeefforts.

The willingness to cooperate in regional economic development efforts implies that policy pro-grams can enhance practical, regional cooperative strategies within the province. For instance, fol-lowing the suggestion of Cigler (1998), communities that show attempts to enhance regionalizationin grant applications can be given special considerations. However, as Baker (1992) suggested, co-operation is more successful and enduring when voluntary. Thus, policy makers need to use publicincentives cautiously. Public policies could be particularly useful where efforts at regionalization arealready underway.

This study has taken the first step towards understanding the perceptions of economic developmentpractitioners regarding competition and cooperation within the Ontario context. Some issues thatemerged from the interviews should attract further studies and policy attention. For instance, althoughpractitioners supported the institutional framework whereby only the upper levels of governments mayprovide financial incentives to attract companies, the system has inherent problems with lobbying.Further research could investigate how those decisions are made, as well as investigate competitionand cooperation among communities during that decision-making process. Further research couldalso detail all existing cooperative activities to determine trends and specific areas where such effortsare most prevalent. Finally, additional research is needed to compare restricted communities withthose that operate with fewer restrictions. Findings from such a study could provide a baseline forpolicy intervention. Finally, given the continuous restructuring of urban regions in the province sincethe late 1990s, further research could investigate whether municipal consolidation has influenced thelevel of competition or cooperation among various communities.


ACKNOWLEDGMENTS: This research was conducted with financial support from the Social Sciences and HumanitiesResearch Council of Canada (SSHRC). Special thanks to Victoria Gordon, who willingly made her research questionsavailable to me. The author would also like to thank peer reviewers and the editor of JUA (Dr. Laura Reese) fortheir helpful suggestions. Finally, the author wishes to thank Catherine Oosterbaan who provided research assistancethroughout this study, and all interviewees who participated in the interviews. Your time and perspectives on the topicare greatly appreciated.

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ABOUT THE AUTHOR

Godwin Arku is Assistant Professor at the Department of Geography, Western University, London,Ontario. He teaches courses in urban development. His research focuses on global economic changesand their impacts on municipal economic development efforts, relationships between housing andeconomic development, and impacts of economic reforms on the urban built environment. Hisregional area of expertise cuts across both the developed and developing world. He holds a BA inGeography from the University of Ghana, Masters from the University of Toronto, and Doctoratefrom McMaster University, Canada.

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COMPETITION AND COOPERATION IN ECONOMIC DEVELOPMENT: EXAMINING THE PERCEPTIONS OF PRACTITIONERS IN ONTARIO, CANADA