THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, February 27, 1995 TAG: 9502250147
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Opinion
SOURCE: BY JAMES OLIVER
LENGTH: Medium: 81 lines
Douglass C. North, in accepting the 1993 Nobel Prize for Economics, spoke about how political and economic institutions determine economic performance.
The difficulty in turning ailing economies around, North noted, is a function of a nature of the institutions and political markets, and, underlying that, the belief systems of the actors.
As evidence mounts that the U.S. economy is really structured around regional systems, the overlay of state and local structures of governance is becoming increasingly incongruent and in direct conflict with the regional nature of our social, cultural and economic interactions.
Regions that have been able to bridge the gap between political institutions and economic realities are experiencing stronger rates of economic growth than we are able to achieve in Virginia because of their comparative advantage in the systems of governance that provide public services and infrastructure.
Virginia's local government system is unique in the nation. We have what are called independent cities and independent counties.
In Virginia, jurisdictions are either cities or counties. While this model of government has some benefit in the form of the reduction of levels of government within a locality, it was designed for earlier times when self-sufficiency was achievable.
Today, the ideal of local economic, social and political self-sufficiency has been overtaken by economic growth and physical development. Yet this ideal remains the basis on which Virginia local government operates.
The effect of this balkanization of Virginia's local government on cities like Norfolk might be compared to the fate of a business that pays all of its net income out to workers and stock holders, retaining nothing for depreciation, new equipment, R&D and staff development.
Eventually the business consumes itself and loses its market share in the process.
On the regional scale, the business in this allegory is the corporate subsidiary with the principal product line. When it goes under, so does the corporation - and the region.
Core cities are not alone in suffering these consequences. Evidence is mounting that the so-called urban condition is spreading to communities previously described as suburban.
Research by analysts such as David Rusk of the Woodrow Wilson Center, Anthony Downs of the Brookings Institute, and William Lucy of the University of Virginia has shown patterns of urban pathology developing throughout each of Virginia's regional areas.
More importantly, their research has shown states that have been able to adjust their municipal and fiscal boundaries to reflect contemporary economic geography are states which are outdistancing Virginia in economic growth.
In response to this situation and the growing evidence of the role played by institutional structure, a number of Virginia communities have developed an alliance with the State Chamber of Commerce called the Partnership for Urban Virginia.
The primary goal of the Partnership is to leverage the learning process between government and business, which hopefully will lead to the institutional and policy changes that are necessary to make Virginia more competitive.
Fundamental to the learning process and the attainment of institutional change, which must be achieved in large measure through legislative actions, is a dialogue that provides an opportunity for active participation by all members of the regional community in the development of solutions and the design and implementation of change.
The effort opened with the first Urban Summit in Richmond on Dec. 9. It will be followed by a series of regional summits throughout the state during April and May of this year.
A second statewide Urban Summit is planned for June. Current members from Hampton Roads in the Partnership are Norfolk, Portsmouth, Virginia Beach, Newport News and Hampton.
Over all, the Partnership has expanded to 18 localities throughout the state. We hope that the business community in Hampton Roads will be leading partners in this evolving enterprise. MEMO: James Oliver is the city manager of Norfolk.
by CNB