Paper: How Local Governments Can Help Their Communities Recover from Economic Uncertainty

The greatest public health crisis in a century has placed an incredible strain on state and local governments. Mandatory business closures and self-isolation have decimated the local tax base. In some places, hospitals are overwhelmed. A crisis of affordable housing has been exacerbated.

In a new policy paper, researchers with George Mason University’s Mercatus Center outline a path local governments can take to ease some of the economic uncertainty. The brief recommends commercial zoning changes that enable businesses to adapt to the needs of this pandemic. Permitting processes should be streamlined to allow more pop-up businesses and the right types of tax incentives should be adopted to spur commercial investment, the brief says.

“No set of policies, no matter how wise or creative, is guaranteed to overcome a deep and painful economic crisis,” the authors write. “In a time of great economic uncertainty, policy success cannot be judged purely by outcomes. But local governments can contribute to an environment in which the foundational economic actors (workers, companies, entrepreneurs, customers) are able to feel their way forward to new, sustainable patterns of specialization and trade.”

Read the full policy brief here.