Volume 8 / Number 2 / Summer 2004

This page contains the abstracts, as well as links to the complete document on Westlaw.com, for the articles in our Summer 2004 Issue.




Recentralization: Community Economic Development and the Case for Regionalism
Scott L. Cummings
Community economic development’s commitment to local empowerment reflects the broad movement against centralized political decision making in American politics. Yet, while it has many virtues, the empowerment orientation of community economic development poses challenges to the goal of distributive justice. In particular, by advancing an inward-focused notion of community that largely ignores the macro-level political structures that shape neighborhood development dynamics, community economic development does not directly respond to the most significant barriers to greater urban equality: government-sponsored jurisdictional divisions that confine poor communities within municipalities that are overburdened by social service demands and under-funded by tax revenues. As an alternative to the dominant localist approach, this Article suggests that distributive justice goals would be better served if community economic development policy and practice were informed by a regionalism perspective. This Article sketches the outlines of what a regionalism approach might look like, describing regional policy initiatives in the areas of affordable housing and economic development, and offering examples of grassroots advocacy strategies that adopt a regional focus. It concludes with a preliminary accounting of the challenges to community economic development presented by regionalism and offers some tentative responses.

Community Economic Development: A Reflection on Community, Power and the Law
Michael Diamond
In this Article, Professor Diamond explores the nature of community. He specifically examines the potential for economic development as a means for achieving the growth of political power and institutions in economically depressed neighborhood communities and the proper role of the neighborhood attorney in facilitating this expansion.

Can a Sovereign Protect Investors From Intself? Tribal Institutions to Spur Reservation Investment
David D. Haddock
Robert J. Miller
A bilateral danger of underperformance exists when two parties sink investments with payoffs dependent on the behavior of the other. There are five general categories of defense against that danger: (1) Legal action against a misbehaving co-investor; (2) Reliance on a reputation for non-opportunistic behavior; (3) Agreement by the party with the less substantial reputation to modify the relative payouts, thus paying the partner a risk premium; (4) Vertical integration that makes a partnership unnecessary; and (5) Forgoing the opportunity altogether. A sovereign can be sued only if it permits that outcome, and must invest in a reputation that assures the partner that it will permit suit. Thus, for a sovereign the first two categories merge. Such a reputation can arise from a history of successful meritorious suits by aggrieved co-investors. But many tribal reservations are small and poor, offer few attractive investment opportunities, and hence exhibit thin histories on point. Consequently they more often pay high risk premiums than similar non-tribal investors, more often vertically integrate where others rely on experts, and more often forego potentially valuable investments altogether. We explore ways to ameliorate those disadvantages and thus improve returns from assets held by or on reservations.

Will New Markets Tax Credits Enhance Community Economic Development?
Susan R. Jones
The market-based approach to community economic development (CED) has been subject to much debate and criticism. The New Markets Tax Credit (NMTC) program was signed into law on December 21, 2000 by President Clinton as part of the Community Renewal Tax Relief Act. To understand the impact of NMTCs, it is essential to analyze the awardees and their proposed investments. Accordingly, this article examines three major projects in D.C. While noble in its effort to attract private sector capital investment into urban and rural low income areas to help finance community development projects, it is still too early to assess the overall impact of NMTC.

Worker Ownership in Enron’s Wake - Revisiting a Community Development Tactic
Peter Pitegoff
Worker ownership of business enterprise has long been touted as a vehicle for community economic development. Employee stock ownership plans in leveraged buy-outs, ESOPs and broad-based stock options in going concerns, and worker cooperatives in selected sectors—the experience has varied widely in goals, method, and outcome.
This Article reflects on the continued utility of worker ownership as a component of community development and calls attention to contrasts with conventional corporate governance and goals. Rather than an end in itself or just another way of doing business, worker ownership can be a vital element of a broader job creation, community organizing, or community revitalization strategy. With respect to corporate structure theory, worker ownership presents a refreshing counterpoint to the conventional corporate governance debate in the Enron era. Its relevance is as a concrete alternative to conventional corporate practices and a hint of the potential in re-making the corporation as a more democratic social institution.

Representing Agents of Community Economic Development: A Comment on Recent Trends
Ann Southworth
Despite the recent increase in lawyers’ involvement in community development, lawyers can contribute still more to regenerating community in low-income neighborhoods by helping to create and maintain organizations. Community economic development currently attracts at least two types of lawyers: transactional lawyers from private practice, who generally may be inclined to pursue conciliatory approaches, and new movement lawyers, who seek to connect community development to larger efforts to promote economic justice. Drawing on a literature emphasizing the importance of citizen associations, this article asserts that lawyers engaged in community development work should seek to serve voluntary organizations and guard against attributing to client groups political goals that differ from ones that clients themselves endorse.