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Recent research on local economic development does not provide an adequate framework for anticipating the consequences of cross national policy transfer and emulation. The research focuses on case specific analysis of one or another program within specific national or economic situations, but such analyses are not structured by a common understanding of the forces which shape policy formation or implementation. This article argues that we must rethink how we understand local policy by combining state‐centered and class‐centered theories of local policy outcomes. It suggests that such an approach would provide a better basis for both anticipating policy outcomes and predicting transferability.

Faced with the imminent loss of its industrial base, Detroit undertook the Central Industrial Park Project to prepare a site for a proposed General Motors assembly plant. By recalculating the benefits and costs involved in that project, this article raises questions concerning the appropriateness of using benefit cost analysis as the sole determinant of local redevelopment policy, and offers a framework for understanding community power in the light of the experiences of Detroit. Rejecting pluralist and reformist notions of community power that focus on who directly benefits, this article suggests that the locus of community power rests with those factions in the community that succeed in maximizing their potential for future gain. Furthermore, any examination of community power at any given moment must also include an analysis of past outcomes. The range of possible outcomes in the present is constrained by the nature of past confrontations between factions within the community.

The purpose of this paper is to recast the light in which we have come to evaluate public policy initiatives and open the door for a more careful examination o f the effects markets have on the course of public policies employing producer incentives to achieve policy goals. Specifically, the paper will review the past experience of urban renewal to show the relationship between policy objectives and outcomes when policy is designed to work through the marketplace. By arguing that market incentives cons train policy outcomes, it is maintained that policies which are judged to have failed in its goals may in reality have succeeded when viewed in terms of normal market operations.