Recognizing Constraints to Local Economic Development

Drawing on Kaufman's distinction between development in the community and development of the community, this paper discusses the contraints on local economic development associated with increased concentration of capital. The likelihood of successfully employing "import substitution" and other localization strategies without confronting issues of non-local control of the investment process is also examined. Two options for responding to capital constraints are discussed: (1) attempts to restore the conditions for non-local private capital accumulation in the community, and (2) attempts to create alternative local investment institutions. It is suggested that the strategy of development in the community subordinates the needs of the community to non-local interests, while the strategy of development of the community carries more potential for improving the quality of life for community residents.