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Spring 2014
ISSN 0890-913X
Volume 29, Number 2

Mountains of Disappointment: The Failure of State-Led Development Aid in Appalachia

Abigail R. Hall, George Mason University
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TheJournalofPrivateEnterprise29(2),2014,83100MountainsofDisappointment:TheFailureofState-LedDevelopmentAidinAppalachiaAbigailR.HallGeorgeMasonUniversity______________________________________________________AbstractIn1964,PresidentLyndonB.Johnsondeclaredwaronpoverty.OnecomponentoftheensuingcadreofgovernmentagenciesandinitiativeswastheAppalachianRegionalCommission(ARC),chargedwithoverseeingthedevelopmentoftheimpoverishedregionstretchingfromsouthernNewYorktonorthernAlabama.AlthoughARCisnowoneofthelongest-runningregionaldevelopmentagencies,ithaslargelyfailedinitsgoalstodeveloptheregion,andmuchofAppalachiaremainsmiredinpoverty.ThispaperexaminesthereasonswhytheARCanddomestic,state-leddevelopmentaidhavefailed.IfindthattheARChasfailedtoachieveitsgoalsfortheregionduetoitsinabilitytoperformrationaleconomiccalculationandasaresultofissuesofpoliticaleconomy.______________________________________________________JELCodes:H11,H59,H79,I30,R58Keywords:Appalachia,AppalachianRegionalCommission,Developmentaid,Economiccalculation,PoliticaleconomyI.IntroductionA1964reporttoPresidentJohnsondescribedAppalachiaasaregionapartfromtherestoftheUnitedStates(PARC1964,p.XV).StretchingfromNewYorktonorthernAlabama,theregioncontainingtheAppalachianmountainrangeisdiverseinitsindustry,topography,andpeople.Despiteitsabundantresources,however,muchofAppalachiaisplaguedbyextensivepoverty.Asof2011,IwouldliketothankChristopherJ.CoyneandKyleW.ODonnellforusefulcommentsandsuggestions.EarlierversionsofthispaperwerepresentedattheworkshopsponsoredbytheHayekProgramfortheAdvancedStudyofPolitics,Philosophy,andEconomicsatGeorgeMasonUniversityandatthe2013AnnualAssociationforPrivateEnterpriseEducationConferenceinMaui,Hawaii.Ithanktheparticipantsfortheirfeedback.83
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