So I hear a new jobs bill could be in the works. It would of course be great to have more funding for job creation, but I wonder if this next round could improve on the last stimulus's approach to doing economic development. One possibility would be to include funding to build up capacity to administer ARRA funds for economic development more effectively. Beefed-up administration could improve the stimulus's effectiveness in three ways.

The first is funding for outreach and marketing. A bewildering array of opportunities have been made available for businesses, workers, and consumers. People don't know what the're eligible for. Local governments, under pressure from budget cuts and new demands, often do not have the capacity or will to reach out to them. This can have a particularly harmful effect on low-income communities and small-to-medium sized businesses, both of which have historically had difficulty accessing benefits and services. They'll only be further cut-off if something isn't done to improve outreach.

There's also solid evidence that outreach matters. An evaluation of California enterprise zones found that areas that did marketing and outreach had more job creation than areas that did not. The evaluation was just written up in the latest issue of the Journal of Policy Analysis and Management. It has a subscription wall, but here's a summary of their key findings:

Zones vary in their demographic and economic conditions. They also vary because local zone management is responsible for marketing and outreach, coordinating other incentives, and other economic development activities in the zones, and zone administrators make different choices about which of these activities they engage in and choose to emphasize. The evidence suggests that the enterprise zone program has a more favorable effect on employment in zones that have a lower share of manufacturing and in zones where managers report doing more marketing and outreach activities; as it turns out, this latter result has some parallels to findings from earlier literature on heterogeneity in the effects of enterprise zones (discussed below).

Another administrative need is for greater planning. Locals need sector-focused plans and the capacity to execute them to get the most out of their ARRA funding. ARRA itself is very complex and there's a risk that traditional policy silos will prevent locals from integrating related programs, like the many initiatives targeting sectors in the "green" economy. Further, governments need to coordinate the ARRA-funded development initiatives with local programs and conditions. Research needs to be done on the needs and priorities of local businesses. Each local and regional economy has its own strengths and weaknesses. Administrators need to know what local conditions are like to develop an effective plan.

Finally, programs need to be evaluated. At the very least there should be funding to solicit input and feedback. This will not only improve program design but could provide more convincing evidence that stimulus programs are working.

Fundamentally, the next stimulus should set-aside funding to build up capacity at the local level. In exchange the Obama administration should find greater job creation and better evidence of the impact the stimulus is having in particular places. It's also worth recalling that the New Deal-era programs weren't just a series of isolated public works projects. They were coordinated and managed by new governing bodies like the Tennessee Valley Authority and the Maritime Commission. The same kind of vision needs to be supplied to restore job growth today.