Explaining City Performance: How Important is State Policy?, Working Paper 020 Open Access

Some cities are successful, attracting businesses and residents, while others struggle unsuccessfully with declining industries and diminishing population. In this paper, we identify cities that over- or under-performed on certain indicators of well-being during the period from 1990 to 2000, compared to their predicted performance according to models we developed. Selecting certain states and their cities, we conducted case studies to examine why a city did particularly well (or poorly) compared to our prediction with respect to the income, population, or housing affordability indicators and what the role of state policy was, if any, in the city’s deviation from expected performance. We then discuss initial findings for a subset of the cities and indicators. The empirical results indicate that state policy can impact city performance, but it is only one of many factors and its influence may be quite small at times.

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