Economic Development: Limited Information Exists on the Impact of
Assistance Provided by Three Agencies (Letter Report, 04/03/96,
GAO/RCED-96-103).

Pursuant to a congressional request, GAO provided information on the
impact of the economic development assistance provided by the
Appalachian Regional Commission (ARC), the Department of Commerce's
Economic Development Administration (EDA), and the Tennessee Valley
Authority's (TVA) nonpower programs, focusing on: (1) the impact of
these economic development programs; and (2) how these agencies
calculate the programs' performance ratios.

GAO found that: (1) there is no study that establishes a strong causal
link between agencies' economic development assistance and positive
economic effects beyond particular locations, projects, and programs;
(2) only two of the several studies reviewed attempted to assess the
overall impact of ARC and EDA assistance on economic development and
they only showed marginal linkage between programs and economic
development; (3) there are no studies on the TVA nonpower programs'
economic impact; (4) the lack of definitive research is due to the
difficulty of linking a program's impact to economic improvements and
isolating its effects from other causes; (5) no study attempted to
address the issues of whether one region's economic growth came at the
expense of another's or whether federal funds replaced state and local
spending; and (6) each of the 3 agencies calculated its 3-to-1
performance ratio by dividing total investment dollars by the investment
dollars it provided, but the agencies' definitions of total investment
dollars differ and calculations are made to only a portion of their
programs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-96-103
     TITLE:  Economic Development: Limited Information Exists on the 
             Impact of Assistance Provided by Three Agencies
      DATE:  04/03/96
   SUBJECT:  Economic assistance
             Economic development
             Community development
             Statistical methods
             Federal aid to states
             Federal aid to localities
             Economic analysis
             Economic research
IDENTIFIER:  TVA Land Between the Lakes Program
             EDA Economic Adjustment Revolving Loan Fund Program
             EDA Public Works Program
             TVA Economic Development Program