Market-Based Community Economic Development

Many urban communities have undervalued assets which offer untapped business and development opportunities. Community economic development interventions can enhance market functioning in these neighborhoods, expanding investment and wealth creation. However, enhancing market performance requires new understandings of how markets operate, of the causes of market failure or expansion, and of the levers that move markets. The paper proposes a framework for analyzing markets through examining their production, consumption and exchange functions. It then suggests ways to enhance these functions by increasing productivity, reducing transaction costs, and influencing consumer behavior, in order to enable markets to expand to include more urban assets, people and places. Finally, the paper offers a business planning tool for undertaking market-based economic development activities.