The Australian Journal of Public Administration, vol. 69, no. 1, pp. 9–21 doi:10.1111/j.1467-8500.2009.00664.x RESEARCH AND EVALUATION An Evaluation of the Economic Approaches Used by Policy Actors towards Investment in Place-Based Partnerships in Victoria Chris McDonald, Lionel Frost, Andrea Kirk-Brown Monash University Al Rainnie University of Leicester Pieter Van Dijk Monash University Place-based partnerships are supported by the state and include various organisations and interests within particular geographic areas. The Victorian government has established placebased partnerships to plan and coordinate resource allocation decisions to meet objectives such as economic development and social inclusion. In the literature there are positive and negative views of these partnerships. One view is that they allow regions to build competitive advantage, while another is that they are a means of pursuing a neoliberal policy agenda that seeks to reduce government protection and investment. We help clarify the tensions between positive and negative views of partnerships by examining the economic approaches used by policy actors toward place-based partnerships in Victoria. We find that policy actors combine neoclassical and institutionalist approaches to argue that partnerships generate networks that enable more efficient and equitable resource allocation within places. Key words: place-based partners, market failures, economic approaches, resource allocation Partnerships with businesses, not-for-profit organisations and community-based organisations are an increasingly important part of the way in which governments address problems of spatially uneven development. These are ‘place-based’ in that they are intended to plan and coordinate the allocation of resources in particular geographic areas. In general, local and regional development encompasses the idea that a sub-national geographic area is a key site of political decision-making, economic prosperity, social cohesion and environment sustainability. The state has generally been in- terested in promoting local and regional development as a means to address geographically unbalanced economic growth (Hudson 2001). The Victorian government has been at the forefront of these partnership initiatives through strategies such as A Fairer Victoria (AFV ) that focus on promoting social inclusion at a neighbourhood level. However, the association between these partnerships and the economic development of places is at present unclear. On the one hand, governments often argue that these partnerships empower local and regional communities to adapt to rapid change and develop  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  10 An Evaluation of the Economic Approaches their economies. On the other hand, partnerships have been criticised because they do not redistribute power and resources, and are therefore reflective of broader neoliberal strategies that seek to reduce government protection and investment. The aim of this article is to evaluate the economic approaches applied by policy actors to justify investment in these place-based partnerships. Policy actors include people involved in policy-making such as bureaucrats, politicians, citizens and lobby groups (Considine 2005). The key research question is: what economic approaches have been applied by policy actors to establish a rationale for investing in place-based partnerships? Investigating this question will contribute to the development of theoretical propositions concerning the association between partnerships and the economic development of individual places. This theoretical development will help to inform future critical research and evaluation about the net economic benefits of government investment in these partnerships. We begin by outlining current debates about the association between partnerships and regional economic development. We then develop a theoretical framework to examine this association and pose three subsidiary research questions. Policy actors may use one of three economic approaches to justify investment in these partnerships: Keynesian, neoclassical or institutionalist. These approaches are considered in a case of Victoria. Finally, we draw our conclusions about the key research question. Debates About the Political Economy of Place-Based Partnerships Political economy perspectives argue that the primary causal mechanism of social outcomes is the unequal relations between labour and capital in production (Harvey 2001; Hudson 2001). Since capital is more mobile than labour, inequalities between areas may be created as industries relocate to maximise profits (Hudson 2001). These distortions may be stabilised temporarily by the state pursuing various accumu- March 2010 lation strategies such as providing incentives for firms to relocate into areas that are experiencing high unemployment. In developed countries partnerships have increasingly become the service delivery mechanism of choice to reduce the incidence of spatial concentration of socioeconomic disadvantage and contribute to the accumulation of capital. Recent contributions to debates about local and regional partnerships focus on how they are organised and the degree to which governments delegate resources and decision-making authority to communities (Boxelaar, Paine and Belin 2006; Keast and Brown 2006; Pope and Lewis 2008). In this article we examine the political economy of these partnerships. Various authors argue that partnerships help build competitive advantage (Cooke 2007; Considine and Giguere 2008). Competitive advantage is defined as the ability of a place to attract and retain investment, and to use its existing assets more efficiently to promote innovation (Porter 1990; Florida 1995; Cooke and Morgan 1998). These assets include human, social, financial, natural and cultural capital (Bathelt and Glucker 2003; Green and Haines 2008). Capitalising upon these assets is dependent upon private, public and not-for-profit organisations working together through partnerships (Considine and Giguere 2008). This argument has been influential in public policy debates in Australia and other Organisation for Economic Cooperation and Development (OECD) nations and has been given various labels including the ‘New Regionalism’ (NR), ‘Liveability’, ‘Social Inclusion’ and ‘Smart Growth’ (Smyth, Reddel and Jones 2004; MacLeod and Jones 2007). Other authors are critical of this perspective and argue that place-based partnerships are reflective of a broader process of ‘neoliberalisation’ that shifts risks and responsibility onto people living in disadvantaged regions and localities (Peck and Tickell 2002; Cheshire and Lawrence 2005; Fuller and Geddes 2008). They draw attention to the continuing commitment of governments that promote partnerships to market led policy reforms that generate negative effects such as increasing inequalities, market volatilities, under investment in  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  McDonald et al. public goods and degraded social and environmental resources. Place-based strategies aim to ameliorate the ongoing negative effects of these reforms by focusing on constructing ‘entrepreneurial places’ that can compete in the context of a globally competitive knowledge economy (Peck and Tickell 2002). Peck and Tickell (2002) and Fuller and Geddes (2008) argue that such strategies tend to have a narrow focus on meeting the needs of capital accumulation, a rhetorical commitment to social and environmental goals, and lack commitment to improving equality between areas. As the number of views presented in the literature review above demonstrates, the association between partnerships and the economic development of places is unclear. In order to contribute to this debate by clarifying the role of place-based partnerships we will review the economic approaches that have been applied by policy actors in Victoria to justify investment in these partnerships. The following section will examine theoretical perspectives about how arguments shape the choices made by policy actors. Theoretical Approach: Examining How Arguments Shape Policy Choices Public policy is a discursive endeavour: it is a messy and uncertain contest of various ideas, beliefs and values which give meaning and motivation to those involved in policymaking (Fischer 2003). In this article we draw on the concept of ‘governmentality’ to inform an interpretive methodology (Dean 1999; Fischer 2003). ‘Governmentality’ is drawn from Michel Foucault’s work on the emergence of the modern state. Foucault (1991) argued that government is a form of power that is applied through the state to shape the conduct of entire populations and achieve outcomes such as increasing productivity or improving public health. Authors who apply this approach identify the rationales and techniques that are used to shape the conduct of others and achieve these outcomes (Herbert-Cheshire and Higgins 2004; Hudson 2006; Lockie and Higgins 2007). This contrasts with theories of state power that 11 focus on the Parliament, the Executive, and Bureaucracy, and how these institutions can be used as points of leverage for various interests or social forces (Moss 1998; Dean 1999). In this article we apply the concept of governmentality because it allows a critical analysis of the economic approaches applied by policy actors to establish a rationale for investing in place-based partnerships. We have adapted a framework, developed by Dean (1999) that uses the governmentality concept to examine how policy choices may be justified. This approach begins by identifying the policy dilemma or issue that government is trying to grapple with. It includes how the problem is defined, its causes, who it seeks to target and the normative goals that are established to resolve it. The framing of these problems and solutions allows government to organise individuals, families or groups into objects of policy intervention. Attention should then be paid to how the successful governing of these objects is attempted or achieved. The activity of governing is dependent on various techniques, including key performance indicators, forms of budgeting and auditing, direct financial investments, partnership agreements, or externally commissioned research (Dean 1999; Hudson 2006). Relationships between these policy choices and ideas such as neoclassical economics or behavioural theories can then be mapped and identified (Dean 1999; Swyngedouw 2005). Economic Approaches that Shape Local and Regional Partnerships Drawing from the framework developed by Dean (1999) three subsidiary questions guide our inquiry to evaluate the economic approaches that have been used to justify investment in place-based partnerships: 1. What problems are these place-based partnerships responding to? 2. What is causing these place-based market failures to emerge? 3. How do partnerships solve place-based market failures?  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  12 An Evaluation of the Economic Approaches We begin by focusing on economic approaches that may influence the rationale of placebased partnerships in Victoria. Based on a review of debates about the political economy of place-based partnerships three economic approaches are identified: Keynesian, neoclassical and institutionalist (Pike, RodriguezPose and Tomaney 2006; Stimson, Stough and Roberts 2006). We now outline how these economic approaches have shaped strategies to promote local and regional development in Australia and Victoria. Keynesian Approach Keynesian approaches dominated mainstream political and policy thought and local and regional policy strategies up until the 1970s (Self 1995; BTRE 2003). Keynes rejected the idea that economies would automatically tend toward an equilibrium that was at the full employment level, and argued that governments should intervene to ensure that national economies operated at this level. This could be achieved through managing the level of aggregate demand by injecting funds in a downturn (through increased government expenditure and/or tax cuts) and deflating demand during a boom (by cutting government expenditure, and/or increasing taxes and/or interest rates). Keynesian informed approaches to local and regional development identified lagging regions and aimed to boost demand in them by investing in infrastructure and utilising subsidies and tariffs to influence the location of export orientated industries (BTRE 2003; Tonts and Haslam-McKenzie 2005). Such policy choices were evident in Victoria after World War II, through state support of the electricity industry in the La Trobe Valley, car manufacturing in Melbourne’s north and west, and the establishment of the Alcoa Aluminum smelter in Portland in western Victoria. Neoclassical Approach Policy directions that were informed by neoclassical approaches – that government should withdraw from managing aggregate demand and protecting industries and ensure the market March 2010 mechanism could work freely – gained force in the 1980s. Reform was achieved through supply side policies that reduced government interference through labor market regulation and taxation, and through investing in factors of production such as labour and technology (Stimson, Stough and Roberts 2006). According to this view, government should only intervene in the operation of the market where there is evidence of a failure to produce efficient outcomes – for example, when negative externalities occur or when public goods need to be provided. In 1993 the Kennett government in Victoria was elected and pursued policy changes that were informed by this doctrine. The Kennett government devolved responsibility for local economic development to local government and undertook a significant reform of the urban planning system to allow more discretion for developers (Gleeson and Low 2000; Buxton, Budge and Boyle 2005). These changes enabled market forces to play a greater role in determining patterns of local and regional development (Costar and Economou 1999; Gleeson and Low 2000). Institutionalist Approach The institutionalist perspective is that markets are socially constructed and incorporate factors such as trust, organisations, governance, cultural ties and identity to explain patterns of economic growth and inequality (Hudson 2001; Pike, Rodriguez-Pose and Tomaney 2006). The ways in which local economies grow may be understood through ‘path dependency’, with the development of institutions and economic conditions being highly sensitive to initial conditions (Martin and Sunley 2006). These ideas focus on the particular characteristics and assets (human, social, natural and cultural) that influence growth within different geographical areas (Bathelt and Bogg 2005). The concept of ‘institutional thickness’ has also been influential. Institutional thickness is derived from the strong presence of intermediary organisations such as chamber of commerce, a good mixture of strong and weak ties between organisations, collective purpose between firms and a strong sense of place identity (Amin  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  McDonald et al. 1999). From this perspective the role of government is to strengthen networks and relationships through partnerships and to invest in the assets of localities and regions, which creates the platform for alternative development trajectories (Cooke 2007). These ideas have been influential in Victoria, for example, through the establishment of the Department for Victorian Communities (DVC) and a focus on community strengthening and partnerships to address place-based disadvantage (Wiseman 2006). A summary of these key approaches based on the framework set out by Dean (1999) is outlined in Table 1. Having reviewed the economic approaches that have influenced local and regional development strategies in Australia we will now assess their contribution to contemporary local and regional development policy in the state of Victoria. Method and Findings There is a growing literature that focuses on methods of evaluating arguments used by policy actors (Fischer 2003; Hajer and Versteeg 2005). ‘Policy Discourse Analysis’ may be used to examine what ideas and categories have been assembled and give meaning to policy processes by identifying the linguistic regularities in the construction of arguments about policy problems and solutions. These arguments should then be interpreted in relation to explanatory theories, with a focus on the contradictions and points of conflict within them (Yanow 2000). To undertake this discourse analysis, we use a pattern matching technique to interpret the data (Yin 2003). This involves a thematic search of key terms in relation to each of the economic approaches outlined in Table 1. The data is drawn from a range of policy and research documents produced by the Victorian government (Table 2). What Problems are Place-Based Partnerships Responding To? We begin the analysis by focusing on how the problem of spatial inequality has been de- 13 fined by the Victorian government. In 2005 the Victorian government released policy statements on social inclusion (A Fairer Victoria) and rural development (Moving Forward). In both, partnerships with place-based communities form a key part of efforts to promote growth and address socioeconomic inequalities. A Fairer Victoria (AFV ) addresses social and economic disadvantage; Moving Forward (MF) seeks to promote economic growth across rural Victoria. AFV identifies ‘disadvantage’ – defined as when people, groups and places in Victoria experience ‘significant barriers to fully participating in Victoria’s economy and society’ – as the key problem for government (State of Victoria 2005c:16). Such barriers cut across economic and social dimensions and include inadequate income, low skills, chronically poor health, discrimination and geographic isolation. The existence of disadvantage is consistent with a key principle of neoclassical economics, that while society works more efficiently if people are able to participate in the market system, markets may fail in some circumstances, requiring government intervention to make markets work more efficiently. The role of public policy is to create investment in supply side factors that ensure that ‘all Victorians have access to the basic building blocks of fairness: high quality education and health services; the chance to develop skills and find meaningful work; and the opportunity to live, work and raise a family in safe and friendly communities’ (State of Victoria 2005c:1). These objectives may be achieved through continuing growth of the state’s economy, expanding access to universal services and providing targeted support to population groups and places in need. Policy actors have assembled evidence from a range of professional and academic disciplines to support the AFV definition of disadvantage. This includes evidence of the ongoing negative effects of low levels of school completion, the burden of diseases such as obesity and diabetes, and of family violence on overall productivity and growth (State of Victoria 2005c:16). The approach draws various aspects of social policy expenditure into the idea of market  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  14 An Evaluation of the Economic Approaches March 2010 Table 1. Economic Approaches that Shape Local and Regional Development Strategies Category Keynesian Neoclassical Institutional Calling into question Spatial inequalities Aggregate demand, Export capacity, Industry diversification Households and firms, Unions/business associations Export growth, Public investment in infrastructure/services, Redistribution Direct public investment in infrastructure and services, Incentives to relocate Comparative advantage in a global economy, Factors of production Localised norms and values, Associational/ decision-making networks Communities, Clusters, Educational organisations Field of visibility Normative solutions Techniques Households and firms, Government costs, Regulatory constraints Investing in factors of production (land/labor/ technology), Cutting cost and regulation Competitive bidding, Public-private partnerships, Outsourcing/contracts Strengthening associational ties, Governance/ administrative efficacy Partnerships, Brokering, Community Engagement Community Planning Table 2. Key Documents Produced by the Victorian Government that Form the Evidence-Base for this Article What When Purpose Growing Victoria Together Department for Victorian Communities (DVC) Corporate Plan A Third Wave of National Reform – A New National Reform Agenda for COAG The Premier’s Alternative COAG Communiqué Challenges in Addressing Disadvantage in Victoria A Fairer Victoria 2001/2005 2003/2004 Whole of government strategic planning Corporate Plan 2005 2005 Proposals for policy reform between Commonwealth and state governments Summary of these proposed policy reforms 2005 Positioning paper on Social Inclusion 2005–08 Moving Forward 2005 DVC – Directional Statement 2006 Laverton Community and Statistical Profile 2006 Indicators of Community Strength: A framework and evidence Caroline Springs: Evaluation Report 2006 Five year policy framework to promote Social Inclusion Policy framework to promote regional development Setting out rationale and strategic directions for DVC Evidence to support Community Renewal Initiative in Laverton Develop a model for indicators of Community Strength Evaluation of Local Partnership Initiative 2007 failure. AFV also makes an argument that disadvantage tends to concentrate within particular places, specifically regions that are experiencing traditional socioeconomic disadvantage (such as neighbourhoods with high concentrations of public housing), those experiencing high rates of population growth (notably at the south-eastern and western fringes of metropolitan Melbourne), and those in rapid decline (especially isolated areas in rural Victoria) (State of Victoria 2005b:12). The place-based focus of AFV has a strong association with the arguments of institutional economics and the path dependent nature of market failures within particular places. Unlike AFV and its focus on social inclusion, MF is constructed from discourses about the economic development of places outside of metropolitan Melbourne. A three part typology describes how the problem of spatially uneven development is distributed across provincial Victoria:  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  McDonald et al. • • • ‘New urban or lifestyle regions’ – people are moving into rural areas that are close to major metropolitan areas because they are looking to downshift or retire, access more affordable housing, or seeking a better place to raise a family. These communities face challenges associated with growth such as skills shortages, availability of housing and pressures on the planning system; ‘Production regions’ – areas that rely on highly efficient agriculture but face challenges in terms of attracting new people and investment; and ‘Regions in transition’ – areas where traditional and new value adding industries co-exist and face challenges in terms of adjustment to these new growth trajectories (State of Victoria 2005d:12–13). This typology also draws from institutional economics and its recognition that markets are socially embedded and path dependent. This definition allows policy-makers to incorporate social, cultural and political factors to explain and classify patterns of spatial inequality, such as the ways in which the lifestyle choices of retirees contribute to changing patterns of investment across provincial Victoria. The key problem defined by policy actors is to address place-based market failures. Policy actors have drawn upon the neoclassical approach to make this argument. Institutionalist approaches have shaped the argument that these places face a diversity of issues because market failures are socially constructed and path dependent. In the following section we examine the causes of these place-based market failures. What is Causing these Place-Based Market Failures to Emerge? Policy actors argue that forces associated with the global economy are a key causal dynamic impacting upon Victoria. Growing Victoria Together (GVT) places Victoria in a ‘competitive world’ (State of Victoria 2001:5). The National Reform Agenda argues that the floating of the 15 Australian dollar and deregulation of the financial sector have opened the Australian economy and underwritten rising living standards over the past two decades (DPC 2005:7). AFV argues that the key causal mechanisms influencing the nature and distribution of inequality in Victoria are largely generational changes outside of the government’s control. They include: growth in knowledge and service based industries at the expense of manufacturing; a lack of housing affordability in some areas; population ageing and decline; and the emergence of more diverse household types (State of Victoria 2005a:4). MF also identifies exogenous and long term causal mechanisms such as ‘globalisation, growing competition from countries such as China and India, the emergence of new types of jobs, access to technology, lifestyle preferences, skills shortages, population growth, and increases in the number of retirees’ (State of Victoria 2005d: 15). These causal narratives are consistent with neoclassical principles that market forces determine distributional outcomes. Policy actors use the neoclassical approach to argue that government can increase market efficiency through investing in supply side factors – particularly the skills and capabilities of the workforce and assets that enable the state to attract skilled workers and investment. GVT identifies ‘creating new jobs in a competitive world by promoting new ideas and technology’ and ‘building opportunities for quality education and lifelong learning for every Victorian’ as key economic challenges facing Victoria (State of Victoria 2001:5). Education and lifelong learning ‘improves everybody’s life chances’ and ‘opens the doors to high quality jobs’ (State of Victoria 2001:8). High quality jobs are defined as those that ‘make full use of the abilities, skills and ideas of all Victorians’ in the state’s existing industry strengths such as manufacturing and ‘emerging strengths in new knowledge-based industries’ such as biotechnology (State of Victoria 2001:20). Growth in these industries is underpinned by the government investing in supply side factors such as ‘world class economic infrastructure, a highly skilled workforce, competitive business costs, high  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  16 An Evaluation of the Economic Approaches performing, cooperative work places and an attractive environment for living, working and doing business’ (State of Victoria 2001:20). Policy actors argue that these investments in the supply side of the economy have in turn influenced the rate and distribution of economic growth in Victoria since 2000. For example, MF makes a clear connection between government action and a turnaround in the ‘economic fundamentals’ of rural Victoria (State of Victoria 2005d:6). It argues that restoration of services and infrastructure across the regions has laid the foundation for future prosperity and helped reverse past trends of disinvestment and population decline. ‘We have made it our priority to restore regional services, investing in hospitals, schools, community services . . . at the same time . . . we have provided unprecedented levels of investment in regional infrastructure [giving] industries and businesses the support needed to grow’ (State of Victoria 2005d:5). This is consistent with neoclassical approaches because it frames investment in social infrastructure and services as expanding the productive capacity of the economy. These statements are supported by an argument that government inaction also influences the distribution of growth and spatial inequalities. For example, disadvantage in Melbourne’s growth areas may be attributed to the failure of infrastructure and services provision to keep up with economic growth (State of Victoria 2005a:12). MF includes elements of demand management policies, including decentralising government employment and incentives for firms to relocate to nonmetropolitan regions, but these measures are marginal in relation to investment in supply side factors. The government also argues that local communities have a role in working from the ‘bottom up’ to influence these outcomes. Spatial inequalities are a consequence of some local and regional communities lacking assets such as ‘a safe, healthy environment and active and inclusive social, cultural and volunteer networks’ (State of Victoria 2001:22). The government can address these inequalities through expanding job opportunities, investing in high quality services and delivering community building approaches that are based on ‘listening March 2010 to local experience’ within particular places (State of Victoria 2001:22). These efforts are underpinned by investments in ‘building better education, knowledge and health (human capital); strong communities (social capital); and well designed and planned neighbourhoods with good facilities (physical capital)’ (State of Victoria 2008b:6). Although the market is ultimately a rational way to allocate resources it is prone to failures and spatial inequalities are an example of this. To restore equilibrium requires government to invest in local assets, and for people living in them to take advantage of them. Here an argument emerges that local and regional communities have a role in influencing the distribution of resources, attracting investment and shaping how markets function. This is consistent with the idea of ‘institutional thickness’ and creates the basis for arguing that communities have a role in addressing market failure. Policy actors have drawn upon the neoclassical approach to argue that globalisation generates uneven distributional outcomes between areas. Government has a role to invest in the supply side factors of different areas to address place-based market failures. The institutionalist approach has also been used to argue that place-based communities have the agency to solve this problem. In the following section we examine how partnerships address these causal factors to solve place-based market failures. How do Partnerships Solve Place-Based Market Failures? The types of place-based disadvantage identified in AFV (socioeconomic disadvantage, rural/isolated and growth areas) each have their own programmatic responses. The government funds two programs that target neighbourhoods experiencing socioeconomic disadvantage: Neighbourhood Renewal (NR) and Community Renewal (CR). NR focuses on areas with high proportions of public housing tenants, while CR targets areas experiencing disadvantage but do not have high proportions of public housing. There are 26 neighbourhoods that are targeted across Victoria through these  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  McDonald et al. programs with populations around 6,000 people. The Community Building Initiative (CBI) targets 19 sites across the state – each covering a network of small towns. Several pilot projects have also been trialed in growth areas with the notable example being the Caroline Springs Partnership (State of Victoria 2008a:63). Local partnerships funded through AFV share a common focus on strengthening communities. Communities are defined as ‘groups of people who share a sense of belonging and where there is a level of trust between members’ (DVC 2003:6). Place-based communities are based where people live and work. Strong communities are defined as ‘having a sustainable mix of assets (economic, human, natural, cultural) and strong governance that maximises the equitable use of those assets’ (DVC 2006a:3). However, a taxonomy or definition of these various assets, and what kinds of benefit they produce are not outlined in these policy statements. Strong communities are bound together by networks of association that link people with each other, into groups and organisations, and to resources and decisionmaking authority. The influence of the institutionalist approach through the emphasis on the socially constructed nature of economic activity is evident here, together with neoclassical concerns with factors of production. This perspective has enabled policy-makers to reconceptualise issues such as education, health, volunteering and organised sport into social, human, and cultural assets which produce economic benefit. Defined in this way, these activities become part of the efficient operation of markets and therefore justify intervention by government. MF has a much looser definition of regional communities that includes groups, firms, universities and research institutions that share associations. These associational ties may exist at a variety of scales and relate to outcomes such as improved managing and planning for growth and adjustment, attraction of new investment, and promoting innovation through clusters. For example, the ‘New Investment Partnerships Program’ is designed to encourage partnerships that invest in projects that add value to major infrastructure investments (State 17 of Victoria 2005d). The government has also provided support for initiatives emerging from partnerships between local governments, businesses and not-for-profit organisations, such as the ‘G21 Initiative’ based around the provincial city of Geelong. G21 includes 60 member organisations and has produced a plan for the region covering a range of social, economic and environmental outcomes (G21 2008). Across MF and AFV these local and regional partnerships are designed to strengthen communities and involve them in the design and delivery of public policy. Local partnerships in AFV are mainly assembled through programs such as CR and NR and they share common design features. The CR Program was established in 2006 by the Department for Victorian Communities (DVC). The objectives of the CR program are: • • • • • • Ongoing community participation in decision-making; New jobs and learning opportunities; Increased neighbourhood volunteering and other support; Upgraded community facilities and open spaces; Greater participation in cultural, recreational and sporting activates; and Improved feelings of safety and well being. The program is governed by published guidelines that set out the ways in which the delivery of the program should be conducted (DVC 2007). It provides funding for the relevant local council to employ a place manager and community development worker. Funding is also provided for community development activities and local infrastructure improvements. The program also establishes new administrative arrangements in each community. A Community Partnership is established that must include a membership of at least 50% of people who live and work in the community, together with local service providers and decision-makers. A Strategic Partnership is chaired by a Local Member of Parliament and includes managers from state and local government, business and not-forprofit organisations. The Strategic Partnership  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  18 An Evaluation of the Economic Approaches is designed to link up decision-makers and facilitate investments that are determined by the community. In establishing these partnerships government is focusing on strengthening networks of association between people who live and work in these communities, and improving their access to decision-making authority and resources. These partnerships have been used by the government to deliver a range of investments into housing, local physical environments, employment opportunities, education and learning, safety and health. Specific investments in NR sites include: • • • • Creating 33 social enterprises that create 130 jobs each year, and delivering employment programs that have created over 4,600 jobs; Creating 23 community hubs and support of 80 community infrastructure and urban design projects; Improving 6,000 homes through redevelopments and upgrades since 2001; and Health and social programs such as establishing community gardens and food cooperatives (State of Victoria 2008a: 58). Policy-makers have drawn upon neoclassical and institutionalist approaches to argue that partnerships solve place-based market failures because they create networks that connect communities to resources and decision-making authority. These networks give place-based communities the agency to attract resources and use existing assets more efficiently and equitably. In the following section we conclude by addressing the key research question. Conclusion The purpose of this article has been to evaluate the economic approaches applied by policy actors to justify investment in place-based partnerships. Three economic approaches – Keynesian, neoclassical and institutional – were identified as potential influences on how policy actors undertake this work. We posed three questions that address these issues: • • • March 2010 What problems are these place-based partnerships responding to? What is causing place based market failures to emerge? How do partnerships solve place-based market failures? The key problem defined by policy-makers in this case is to address place-based market failures that have emerged because of factors beyond government control, such as increasing globalisation. The nature of this market failure varies across localities and regions, because each place tends to develop in a path dependent way. While government needs to address market failure through investment in supply side factors, place-based communities also have a role because of their capacity to attract resources and use existing assets more efficiently and equitably. Partnerships organise this agency by creating networks that connect communities to resources and decision-making authority. We argue that the framework developed by Dean (1999) is a useful device for evaluating the economic approaches that have been used by policy actors to justify investment in these place-based partnerships. The Keynesian approach has not influenced these arguments. Policy-makers have drawn upon the neoclassical approach to define problems and justify intervention by government. Institutionalist thinking has shaped the argument that places face a diversity of issues because market failures are socially constructed and path dependent. The institutionalist approach has also been used by policy-makers to argue that place-based communities have the agency to solve this problem. By combining neoclassical and institutional approaches policy actors have come to the conclusion that partnerships between communities and government are the logical policy choice to solve problems of spatially uneven development. The Victorian government seeks to solve these problems by shaping the conduct of these communities through programs such as Community Renewal. In order to strengthen this conclusion the findings could be tested further through direct  C 2010 The Authors C 2010 National Council of the Institute of Public Administration Australia Journal compilation  McDonald et al. interviews with the policy actors who are involved in these programs. It is now common in Victoria for policy actors to contend that partnerships generate economic benefits because they are a mechanism to invest in assets and use them more efficiently and equitably. We argue that insufficient attention is paid in the literature to how this mechanism works and how partnerships might enable more efficient and equitable resource allocation. Rather, critiques of partnerships focus on how they are an indication of the broader processes of neoliberalism. In this article we have shown this critique does not adequately explain the association between these partnerships and the economic development of places. The partnerships that are central parts of the Moving Forward and A Fairer Victoria policy documents are evidence of the willingness of government to invest in the economic development of places that have been disadvantaged by structural change. 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