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State policy makers are concerned about costs of past policies whose benefits are often difficult to determine. Some have recommended a strategic approach to state economic policy making in order to eliminate ad hoc incentives. Lessons derived from the literature on state enterprise zones are used to assess the 1993 Federal Empowerment Zone and Enterprise Community initiative. States can expand policy alternatives by fostering the growth of a marketplace of economic development ideas at the local level. Strategic plans should focus on development of competing, bottom‐up solutions, rather than packages of specific incentives.

Microcredit is a concept that has gained widespread acceptance by international development agencies & major donors. It is viewed as a way to correct both governmental & market failure in sub-Saharan Africa. Many view microcredit as a method for linking the formal & informal sectors of African economies to increase the reach of the formal sector. Extending the reach of the formal economy through microcredit is possible, & desirable, depending on macroeconomic reforms, respect for traditional financing relationships, & local control of institutions. However, very little has been done to determine the extent to which microcredit programs actually increase economic well-being. The model program, Grameen Bank of Bangladesh, has been studied & evaluated, but replications may not be inherently successful. The literature accepts that microcredit will increase economic well-being, if programs are correctly designed. Program design issues cannot be resolved, however, until economic well-being is measured & associated with specific designs. 2 Tables, 54 References. Adapted from the source document.