Economic development is a priority of all levels of government; irrespective of country, constitution or system of governance. This is particularly the case in Australia, where federal, state and local tiers of government are undertaking activities intended to support economic growth. However, roles and responsibilities are not always clear, which reflects inter-organisational, intergovernmental and intra-organisational conflict, contradictions, duplications and fissures. Traditionally the role of local government in the subnational economic development policy space has been rather limited, although their remit and engagement in this sphere has increased steadily since the 1980s. Even so, the role of councils in subnational economic development – and metropolitan and regional economic development in particular – remains ambiguous and contested. Derived from findings from a project funded by the Australian Centre of Excellence for Local Government investigating the role of local government in the organisation and promotion of economic development, this paper intends to make two contributions to the literature. First, it shows how the conceptual messiness of the notion of (metropolitan and regional) economic development can both enable and constrain local government practice. Secondly, a state-level policy vacuum is apparent, which is a source of frustration amongst local practitioners. A key policy implication is the need to open-up more space for dialogue between different tiers of government to help engender a shared understanding of economic development, including the roles of different actors.