Economic Development

Three Levels of Analysis

There are three general levels of looking at highway related economic development. One is at the national level e.g., how much do our nation's highways help the national economy. FHWA's Offices of Transportation Policy Studies and Highway Policy Information are sometimes involved at this level.

Another is at the regional level (e.g., what kind of transportation investments should a region make to optimize its economic growth). A good example of this is the Latin America Trade and Transportation Study. The reports, which were generated by this study were incorporated into products such as the State long range plan and the State Transportation Improvement Program in the 13 southeast States (and the Commonwealth of Puerto Rico) that were part of the study. An earlier example of economic development at the regional level was what became known as the Delta Report. A short version of this was published in the 1996 winter issue of Public Roads (also available are the full report of the 1996 Delta report which focused on transportation and the 2000 Delta report which was on comprehensive planning aspects of the Delta). As noted in the public briefing for the Economic Development Highways Initiative, the 1996 report influenced Congress's interest in this general subject. The 2000 report was approximately contemporaneous with the creation of the Delta Region Authority. An example of a regional economic development organization that has done some work on transportation is http://www.ngplains.org/. For many years, federal highway funds have participated in projects under the administration of the Appalachian Regional Commission (ARC). The mission of the ARC is to create opportunities for self-sustaining economic development and improved quality of life within the Applalachian region which is comprised of portions of 13 States. The ARC transportation program is one of the tools the commission has to achieve this mission. Some individual projects are sufficiently large in scale to have regional impacts. A Guide for Quantifying Economic Impacts of such projects was published by the U.S. Office of the Secretary of Transportation.

The FHWA is aware that many States have economic development highway programs. Some of these concentrate on improving or constructing short sections of highway that connect employers to regional highways. Some concentrate on connecting urban areas with 4-lane highways. Some are essentially State contributions to projects that come from local economic development programs. The FHWA funded research that developed a catalogue of these programs as they existed in late 2002 and early 2003, and a more detailed look at four specific such programs. This research was conducted by the Economic Development Research Group. The FHWA considers the statements made in the report to accurately report the facts and opinions at the time of the report. However, the FHWA does not necessarily agree with such opinions and recognizes that State program change their nature over time.

Finally, there is the local level, where FHWA seeks to have better understanding of the causes and/or mechanisms that make improvements in highways help local economies. Two reports were developed by the Economic Development Research Group Inc. and Cambridge Systematics, Inc. under contract with FHWA. They offer a summary of literature, data sources and agency needs, as well as, guidance for using empirical information to measure the economic impact of highway investments. FHWA encourages those doing before-after (a.k.a. ex-post) studies to examine them at www.edrgroup.com/. An example of a study of the effect of the World Trade Bridge in Laredo, Texas, using employment statistics collected by the Federal government (and showing substantial job growth after the bridge was built) would be an example of this kind of study.