Implementing ARRA--Another Way to Gauge Stimulus Success

by Mark Muro | August 31, 2009

With the President Obama’s $787 billion stimulus package (aka, the American Recovery and Reinvestment Act or ARRA) six months old now, it's fair to ask like everybody else is: How’s it working?

One way to decide is to simply count the jobs created and jobs preserved. And on that front the commentariat has been quick to pronounce. The Heritage Foundation’s James Sherk says the stimulus has failed to stem the unemployment rate, while economist-columnist Paul Krugman--who has worried the package was too small--concludes that around a million more Americans are working now than would have been employed without the plan. Krugman believes the stimulus has played a “significant role” in pulling the economy out of its free fall.

However, there's another way to gauge success, and that is to ask how well the law is working to stimulate metropolitan innovations in governance and program delivery—innovations that offer the best chance to truly maximize the impact of recovery investments. Shunted aside by the need to intervene quickly last winter, this goal of longer-term “transformation” has never been renounced by the Obama administration and in fact is rightly retained.

Recently we’ve been focusing on the fortunes of such creative local implementation in a recent in-depth paper and 15 “design snapshots” profiling leading-edge stimulus applications.

 What did we find? On balance, we concluded that ARRA is an imperfect instrument for metropolitan stimulus and empowerment. In too many cases its congressional authors chose to adopt ready-to-hand rather than creative or innovative delivery systems. Therefore, ARRA is too much defined by the program silos, standard operating procedures, and rigid delivery systems of five decades of federal “business as usual.”

As a result, since “business-as-usual” is hostile toward creative action at the metropolitan scale, so is ARRA.

And yet, in some metro areas some actors have refused to set aside the goal of “transformation” and are laboring hard to fashion truly creative, even “game-changing” uses of ARRA.

These innovators--city and county officials; leaders from neighborhood and advocacy groups and other non-profits; executives from local finance and utility companies; representatives of universities and community colleges; directors of metropolitan planning organizations (MPOs), chambers of commerce, and civic organizations—are in a number of regions striving to make the most of ARRA’s significant funding flows.

They are working to link, align, or otherwise utilize ARRA programs to advance considered regional strategies that promote productive, inclusive, and sustainable growth. They are putting data and integrated solutions to work in search of long-term improved performance. Frequently, they are striving to use the short-term, imperfect programs of ARRA to seed more profound investments and partnerships of longer-term value.

No doubt, the near-term stabilization at the center of the bill’s urgency matters hugely. But wouldn’t it be best of ARRA not only helped pull the economy out of its swoon but also catalyzed the next generation of policy innovation in metropolitan America? We think so and will be on the case in the coming weeks tracking how things unfold.

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