Ball State Economist, Michael Hicks, has a column explaining that, while there is strong evidence that a community’s quality of life investments spur economic growth in that area; Indiana’s policymakers have mostly chosen to pursue the less reliable “agglomeration” model for economic growth.
Quality of life investments are amenities like outdoor recreation, cultural attractions, dining & entertainment, etc. Quality of life can also refer to things like education, public safety, access to quality housing options, and a clean and healthy environment. Meanwhile:
Agglomerations is the technical term for the magic that happens when businesses cluster in a certain area. … The idea is simple. Businesses that locate close to one another inadvertently share innovation and skills. They may do so through formal cooperation, by hiring one another’s staff or just by having people from the same trade hang out at a bar or go to church together.
One way or the other, the trick to economic growth basically involves getting educated people with their attendant abilities and skills to live in your area. Hicks tells us that the former is much more reliable than the latter. In spite of this, Indiana’s policymakers have spent far more resources on agglomeration than quality of life – spending gobs of money trying to attract employers to various places.
Part of this – maybe a large part – might simply be a matter of imbalanced lobbying power. Companies who want government money have a pretty compelling incentive to hire people who can advocate for policies that direct public money to their private interests. The general public has a much more diffuse interest in the benefits that come from quality of life investments – particularly before they are actually built.
But I also have a sense that there is a strain in Hoosier thought that regards spending money on quality of life as frivolous. Maybe this goes back to our Calvinist/Puritan roots. Spending money on business and work is serious and productive. Spending money on a more enjoyable life is wasteful, possibly sinful. This world is a testing ground for the faithful, not a place for joy! (To be clear, this is me speculating; not something Prof. Hicks has ventured.)
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