Patterns in State Economic Development Policy

This article examines two related questions: Can state business climates be categorized by their economic development policies, and if so, what political or economic variables are associated with these categorizations? Using hierarchical cluster analysis and the Corporation for Enterprise Development's 1990 Development Report Card for the States, the authors find that states cluster into two dominant categories, referred to as programmatically rich and programmatically lean. The degree to which these categories are associated with political, environmental, and regional factors is then examined. Using bivariate analysis, the authors find that programmatically rich states are associated with strong governmental capacity and labor union influence, and that programmatically lean states are inversely associated with these factors. Furthermore, this study finds that, even in an age of globalization, region remains a powerful determinant of developmental policy patterns.