MUNCIE – Among the first lessons I absorbed as a second lieutenant was simply, “Always reinforce success, not failure.” But one need not graduate from the Infantry School for such a lesson. Any parent knows full well that long-term success comes only from rewarding good, not bad, behaviors. And so it has been with two enormously successful state development programs; Stellar Communities and the Regional Cities Initiative.
    
It is easy to understand cynicism about these programs. Many places in Indiana are represented by multiple economic development groups with numerous expensive dust-covered plans adorning their office shelves. Nearly all clever folks know that government planning of private sector activity has universally failed, and that is most definitely not what is happening in either Stellar Communities or Regional Cities. Understanding that is critical to this debate.
    
Together the Stellar Communities and Regional Cities efforts have incentivized local governments representing more than three-quarters of Hoosiers to sit down together and try to plan out how their local governments will spend tax dollars. This remarkably frugal effort deploys about 3 cents out of every 100 dollars spent by state and local governments in this budget. Moreover, all the Stellar money is from the federal government. I know of no other effort that has done so much for so little.
    
This is not about picking winning and losing businesses or industries, as some poorly informed pundits have suggested. It is rather about the mundane but critical decisions about where and when to do things government does: Build roads, fix streets, upgrade sewers, and make their communities places where families and businesses wish to make a future.
    
The best example of this comes from a group known as the Michiana Council of Governments, or MACOG. For a generation this group has conducted monthly meetings on the most important but commonplace issues, traffic safety, road construction schedules and the like. This isn’t soviet central planning, rather it is the type of local government cooperation that has been the dream of leaders since the Mayflower Compact.
    
It is no surprise the Regional Cities plan for this region had its genesis at MACOG meetings. It is likewise unsurprising that the places with the weakest proposals have nothing remotely akin to MACOG working in their regions.
    
Finally, it bears repeating what these regional plans are and what they are not. The good plans have three distinguishing characteristics. First, they are grassroot efforts, derived from either direct public meetings or the existing policies of local elected leaders. Second, they are all about how good local government can lay the groundwork for private sector investment. Finally, they are grounded in realistic assessments of the future, not fanciful dreaming.
    
The Stellar Communities and Regional Cities Initiatives represent a much-needed revolution in Indiana economic development policy. These are 21st century policies, rooted in good local governance, free markets and a respect for the wishes of community residents, not consultants or site selectors. They aren’t perfect, but they are the best thing to come from state government anywhere in a generation.

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University.