Political influence of bureaucratic outputs: The designation process of empowerment zones and enterprise communities

In response to the declining social and economic conditions in America, the federal government passed the Empowerment Zones and Enterprise Communities (EZ/EC) Act of 1993. To be selected as an EZ or EC, communities are challenged to catalogue their resources and develop innovative strategies to alleviate the problems that have been identified in their applications. From the 292 urban applications, the U.S. Department of Housing and Urban Development (HUD) was charged with designating six EZs, which would receive a $100 million grant and tax incentives, and 65 ECs, which would receive a $3 million grant. To explain why HUD selected the final list of EZs and ECs in 1994, the research uses two approaches. Qualitatively, the legislation and program materials are analyzed, interviews with former members of the White House, HUD, and congressional staffers are incorporated, and floor speeches and hearing testimony from members of Congress are examined. Quantitatively, original data is collected from the applications to capture bureaucratic, congressional, and presidential preferences in the selection process. The three sets of variables appear in eight logistic regression models to test 11 hypotheses, which are primarily drawn from distributive theory and principal-agent theory. The regression results demonstrate that the city's characteristics (e.g., poverty and number of entities involved in the application) are statistically significant in all of the models in which they appear. Of the political variables, the House of Representatives (e.g., committee assignment, presidential support score, and number of representatives) is more significant than the variables corresponding to the Senate or the president. Thus, the results offer some support to HUD's contention that EZs and ECs were selected on the basis of merit. Although a larger number of non-political variables are statistically significant than political variables, the findings illustrate that political factors cannot be discounted in the selection process.