A brief from the Brook­ings Insti­tu­tion authored by Mark Muro, Robert Max­im, Antho­ny F. Pipa, Yang You, and Colleen Dougher­ty paints an opti­mistic pic­ture for place-based pro­grams, which could receive increased fed­er­al fund­ing thanks to the Build Back Bet­ter Act.

Some of the pend­ing place-ori­ent­ed pro­grams would boost the nation’s region­al inno­va­tion capac­i­ty by invest­ing hun­dreds of mil­lions of dol­lars in region­al tech hubs, man­u­fac­tur­ing insti­tutes, and region­al indus­try clus­ters. Oth­ers would pro­vide block grants so dis­tressed labor mar­kets can expand employ­ment oppor­tu­ni­ties. And still oth­ers would chan­nel mul­ti­year invest­ments into com­mu­ni­ties to help with ener­gy and indus­tri­al tran­si­tions, com­mu­ni­ty revi­tal­iza­tion, and rur­al part­ner­ships.

Although these pro­grams haven’t received much media atten­tion, the authors note, the more than 30 place-based pro­grams in the bill “rep­re­sent a gen­uine break­through for the grow­ing recog­ni­tion that smart invest­ments aimed at strength­en­ing the economies of par­tic­u­lar regions or local­i­ties can enhance over­all wel­fare and pros­per­i­ty.”

This stands in con­trast with pri­or pol­i­cy that assumed mar­ket forces would even­tu­al­ly lessen the dif­fer­ences between places, even as the eco­nom­ic health of regions and indi­vid­ual towns and neigh­bor­hoods grew fur­ther apart. Now, research from Brook­ings and oth­ers is show­ing the poten­tial of place-based eco­nom­ic devel­op­ment that con­sid­ers local con­di­tions and needs.

While place-based ini­tia­tives come with their own set of chal­lenges, the pro­posed poli­cies in the Build Back Bet­ter Act could pro­vide a new frame­work for approach­ing eco­nom­ic devel­op­ment and reduc­ing region­al inequal­i­ty.

As of Decem­ber 15, the Build Back Bet­ter Act appears unlike­ly to be approved by the end of the year, though the White House put out a state­ment reaf­firm­ing sup­port for the leg­is­la­tion from with­in the Demo­c­ra­t­ic par­ty’s more obsti­nate ele­ments.