Journal article

Funding of regional economic development organisations

Regional planning Government expenditure Central-local government relations Australia

Regional development organisations (RDOs) primarily aim to increase the pace and diversity of economic growth in their localities or, where adverse structural change requires economic adjustment, to avoid or reduce the rate of economic decline. Economic growth and rising population benefit regional communities in many ways: lower unemployment, more services, better quality living environments, and lower out-migration, to name but four (Mason and Smith, 1992). Thus RDO programs tend to emphasise economic policies and strategies more than social and environmental considerations. That is also true, even when the programs pursue strategic defence or political ends.

In common with other developed countries, Australia has two main models of funding for RDOs: the "top-down" approach, where central (State or Federal) government provides the funds and the objectives; and the "bottom-up" approach, where a regional or district community provides the bulk of the funds and determines the objectives.

In Australia, the life of regional development organisations tends to be short, that is, less than 10 years. A common reason for the closure or major re-orientation of such organisations is lack of money, either because government funders have changed their program or have withdrawn for other reasons, or because private funders discontinue their support. Short life cycles mean a lack of career paths for staff and of expertise at the management committee level. Equally, it could be argued that governments also lose the pool of practical experience and knowledge gained at the regional level.

In view of these deleterious effects, funding arrangements are important, especially where funding is insecure and funders' demands are contradictory or unclear. The trend internationally during the last decade has been to rely upon the targeted regional population to provide the most significant inputs to the development process (Drabek, 1987). In this way, development objectives are articulated mainly by local people and are likely to gain the support of a large proportion of the community.

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