The Economic Impact of Small Regional Commissions: Evidence from the Delta Regional Authority

Factors such as falling U.S. migration rates and diverging regional economic fortunes have heightened interest in place-based policies. Indeed, the U.S. has had many such federal efforts including recently enacted Opportunity Zones. Historically, substantial federal funding has gone to regional economic development programs such as the Tennessee Valley Authority (TVA) and Appalachian Regional Commission (ARC). Yet, little is known about the benefits of some of the smaller place-based programs. We extend the literature on regional commissions by analyzing the economic gains to the Delta Regional Authority (DRA). The DRA was founded in 2000 to provide enhanced development aid to 252 Lower Mississippi Valley counties. Using data over the 1997 to 2016 period, we assess the DRA’s impact on employment, income, migration, and poverty. One-to-one propensity score matching is used to generate a set of counterfactual counties. Due to the endogenous nature of the treatment, we instrument for counties being included in the DRA using a dummy for whether the county is within the Lower Mississippi Watershed. The ensuing results reflects an estimation of the intent- to-treat benefits of the DRA. We find that the DRA is associated with income gains and decreases in unemployment; however, no impact on poverty or migration. In sum, the DRA produces economic benefits that greatly exceed its direct costs