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The Politics of Redistributing Urban Aid

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Title: The Politics of Redistributing Urban Aid
by Douglas J. Watson, John G. Heilman, Robert S. Montjoy
ISBN: 0-275-94716-5
Publisher: Greenwood Publishing Group
Pub. Date: 30 January, 1994
Format: Hardcover
Volumes: 1
List Price(USD): $57.95
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Average Customer Rating: 4 (1 review)

Customer Reviews

Rating: 4
Summary: A fine study of the successes of the federal UDAG program.
Comment: Can the federal government effectively target funds to needier communities? Does political support exist at the federal level to achieve redistribution in the allocation of intergovernmental aid? The purpose of book is to answer these questions through a case study of the Urban Development Action Grant Program (UDAG). The authors contend that "...effective targeting and redistribution of resources undermine political support for the policies and programs that accomplish them (p. 2)." Their thesis is that "...large redistributive programs such as UDAG automatically generate political opposition powerful enough to transform them into distributive programs or lead to their demise. This study of UDAG is a good example of what happens to federal programs that seem to work. The authors' argue that the very success of UDAG in targeting economic development funds to stimulate private investment in distressed cities may be the reason for its demise in the late 1980s. UDAG was a difficult program to create in 1977 because its redistributive purposes meant that achieving the necessary political support in Congress would be tricky. It ran counter to the pork-barrel politics and logrolling style of Congress in which bills try to have something for everyone or a quid pro quo on a future bill. The Carter administration was able to push the bill through Congress but its later demise would be due to weak political support. Distributive bills have a far better chance of passing the Congress than one that would reauthorize a program that redistributive federal monies to selected, needier communities. This case study of UDAG effectively addresses issues posed above. In Chapter 3 the authors present a careful and thorough account of the political history of UDAG, showing the linkages and differences between this urban program and others that preceded it. They carefully demonstrate that after authorization, the program had to undergo further definition by HUD in order to be implemented; in addition, amendments to the program were eneacted by Congress in 1979 to better target funds to "pockets of poverty." But, the evolution of UDAG throughout the late 1970s and early 1980s was one of political and programmatic changes to refocus, make less-targeted, make less redistributive, and make more universalistic the direction of the program. The end result was to produce a program in the Reagan years that had little political support, declining appropriations, and weak linkages to its original purpose. This assessment of the authors is supported by a series of GAO reports on UDAG and an internal HUD evaluation of UDAG in 1982. The book does a good job of summarizing the crux of the issues raised by these reports. The general conclusion is that politics makes it very difficult to effectively target programs to distressed communities. Members of Congress, particularly those whose districts do not benefit from a redistributive program, seek to expand the boundaries of programs like UDAG in order to receive a greater slice of the federal budget pie. But the broadening of programs without massive new funding produces insufficient funds directed to urban problems. The end result is that federal dollars are spent with only modest impact on the intended objective, which is relieving economic distress in the neediest communities. Who benefitted from UDAG? In Chapter 5 the authors present the heart of their empirical analysis of the program, comparing so-called Rustbelt and non-Rustbelt cities that received UDAG funding. Their analysis is descriptive and understandable, presenting an effective test of their thesis. The conclusion of the analysis is that UDAG was essentially a redistributive program throughout its lifetime. Because of its targeting, it did not provide equal shares of funding to all regions and states, thereby undermining political support for the program. Only the small cities portion of the program followed a distributive pattern, offering somewhat more non-targeted aid to non-Rustbelt communities. The demise of UDAG is consistent with the books premise that giving three-fourths of the money to large cities in a basically redistributive pattern killed political support for reauthorization. Of course the bashing that the program took from the Reagan administration and its abuse by HUD also contributed to its demise. The authors raise an issue in their presentation suggesting that the UDAG experience reflects a "structural limit" in our political system (p. 10). They seem to believe that redistributive programs may be doomed to failure in this country because of the policy-making process. I don't buy this premise. Many redistributive programs have been successful and have survived politically. More likely, UDAG is just another in a long line of programs that were created to serve targeted needs but were broadened over time by the Congress. This country has a history of universalism in the reauthorization of programs--be they urban or rural, rustbelt or sunbelt, Democratic or Republican initiatives. The interesting finding of this study is that UDAG survived for as long as it did as a more-or-less redistributive program targeted to needier cities in needier regions of the country. In some ways it may be better for urban areas to fight for targeted programs--even if they will only survive about a decade. Ten years of targeting to distressed cities may be far better than 20 or 30 years of universalistic distribution of federal urban funds.

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