Released Oct. 15, 2007

COLUMBUS, Ohio -- The fact that Ohio isn't doing well economically is hardly news. But Ohio isn't doing well even compared to most of its Great Lakes-area peers, say Ohio State University researchers, and it hasn't since the early 1970s.

Fortunately, they believe they may have dispelled myths surrounding Ohio’s persistent downturn. In a new report, they offer explanations and recommendations to help the state turn things around.

Mark Partridge, the Swank Professor of Rural-Urban Policy, and Jill Clark, program manager of the Exurban Change Project, recently completed the second in a series of "Growth and Change" reports examining economic and demographic trends in the state. The current report, "Employment Growth, Future Prospects, and Change at the Ohio Rural-Urban Interface," is online at http://aede.osu.edu/programs/Swank/.

"There was a time when Ohioans earned 10 percent above the national average in per-capita income," Partridge said. "Now we're 10 percent below. If we simply met the national average, that would be significant -- it would mean an average of an extra $12,000 a year for a family of four."

Traditional explanations of the state's downturn don't make much sense under scrutiny, the researchers said. There's simply not sufficient evidence to blame Ohio's continuing poor performance on popular explanations, such as a declining manufacturing base or bad Midwestern weather, because other Great Lake states face the same problems.

"Let's stop blaming the loss of manufacturing and start looking at some things that are more systemic," Clark said. "Those things are harder to address, but we need to start looking at them."

In particular, the state's governmental structure caught the researchers' eyes.

"We have expensive government," Partridge said. "I'm not saying we're wasteful, but when you have a governmental body, you need boards, overseers, all kinds of overhead that aren't truly necessary to provide services. The problem lies in how we set up Ohio's government in the 19th century. Is this really how we want to do business in the 21st century?"

Clark said that not all Great Lakes states have a governmental structure like Ohio's, in which every village, township and county have separate governing boards and councils. States that have "thinner" governments, such as Wisconsin or Minnesota, tend to be doing better economically than those that have more governmental layers, such as Ohio, Michigan and Pennsylvania.

"Ohio has so many villages and townships, and most have their own fire department," Clark said. "The state should consider offering incentives to work more regionally."

Replacing the current governmental structure with a leaner, regionally focused structure is a tall order, the researchers admit. But in the long run, making the transition would pay off.

"If we create strong regional economies that are focused on wealth creation, we'll attract industries to the state. We don't have to try to guess what sectors will be 'hot' -- they'll see the changes we're making in Ohio and come to us."

Clark said many of Ohio's residents already behave in a regional manner.

"Just take a look at commuting patterns across the state, and you'll see how interconnected the economy is" across township and county lines, Clark said. Decisions made regarding the local economy of a major city, can easily have a ripple effect in areas within an hour's commute.

Another recommendation focuses on how to target economic development incentives throughout the state to focus on creating new wealth.

"Right now, we often use tax incentives to reward companies for locating in a blighted area," regardless of whether the move actually improves the area's economic conditions, Partridge said. Companies often pull already-employed people from other areas to their new facility, and the tax credits they gain don't help people move out of poverty.

"Instead, if we feel we must offer incentives, why not reward companies for actually hiring poor people in those areas? That would have a direct impact on the local economy and put those tax dollars to much better use," Partridge said.

Both Partridge and Clark are with the Department of Agricultural, Environmental, and Development Economics in the College of Food, Agricultural, and Environmental Sciences. Partridge also has appointments with Ohio State University Extension and the Ohio Agricultural Research and Development Center. Graduate student Ayesha Enver assisted in the project.

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http://www2.dasnr.okstate.edu/Members/katie.reim-40okstate.edu/family-mealtime-makes-a-difference

Contacts: Mark Partridge, (614) 688-4907, partridge.27@osu.edu

Jill Clark, (614) 247-6479, clark.1099@osu.edu

Martha Filipic, (614) 292-9833, filipic.3@cfaes.osu.edu