History of EDA
In 1961 the Area Redevelopment Administration (ARA) was established as a demonstration project, and became the first federal program designed to advance area economic development. This pilot program represented a significant adjustment of previous federal macro-economic development policy as it focused on providing federal resources that were based on an understanding of and tailored to meet the unique needs of distressed portions of the country. The ARA was authorized to implement several programs, including those focused on providing business loans, public facility grants and loans, technical assistance, and training assistance. By June 1963, the ARA had exhausted its public facility grant authorization and for the next two years implemented the public facility program solely with loans.
President Lyndon Johnson signs the Economic Development Bill, August 26, 1965
In 1965, Congress passed the Public Works and Economic Development Act of 1965 (PWEDA) (42 U.S.C. § 3121), which authorized the creation of the Economic Development Administration (EDA) to succeed the previous ARA organization. The newly created EDA organization retained many of the unique flexibilities and programs of the previous ARA program, with the exception that it was given a larger public works grant and loan program that had previously been afforded to ARA, and the previous authorities to support job training programs were removed and transferred to the Department of Labor.
In large measure, EDA was established to create and retain jobs and to help stimulate industrial and commercial growth in distressed rural and urban communities across the nation. PWEDA was authorized in support of President Johnson’s domestic focus to create and expand programs that would provide distressed communities the resources needed to realize the benefits of progress other portions of the country were experiencing. Since the enactment of PWEDA in 1965, successive Congressional reauthorizations have expanded EDA’s initial authority to provide the agency enhanced flexibility to carry out its mission.
For the three decades after PWEDA’s initial passage, EDA primarily focused on providing assistance to help communities develop basic infrastructure, including water, sewer and roads. In the early-1970s EDA’s portfolio expanded to include an extensive planning initiative which soon became the Partnership Planning program.
By the mid-1970s, EDA received special authority to create the Economic Adjustment Assistance Program, designed to address economic development challenges more proactively and more effectively. Authorized by the new Title IX of PWEDA during reauthorization in 1975, the Economic Adjustment Assistance Program specifically authorized the agency to take action in any area having or facing major structural changes to its economy. This change was designed to provide EDA the latitude needed to work proactively with local partners to address economic challenges before they became deep-rooted and more costly to the community in terms of lost jobs and revenues.
In enacting PWEDA and its amendments, Congress articulated the importance of EDA’s mission that centers around three central tenets, as outlined below:
“(3) the goal of Federal economic development programs is to raise the standard of living for all citizens and increase the wealth and overall rate of growth of the economy by encouraging communities to develop a more competitive and diversified economic base by—
- creating an environment that promotes economic activity by improving and expanding public infrastructure;
- promoting job creation through increased innovation, productivity, and entrepreneurship; and
- empowering local and regional communities experiencing chronic high unemployment and low per capita income to develop private sector business and attract increased private-sector capital investment;”a
In 1974 Congress passed the Trade Act, authorizing EDA to create the Trade Adjustment Assistance for Firms Program to support firms negatively impacted by federal policies that fostered global connections and trade.
By the late 1980s, EDA was serving a significant role in shaping the federal economic development agenda. During this period, EDA’s Research Division completed a number of reports that helped inform the broader federal economic development policy. This work led to a number of collaborative inter-agency partnerships. For example, in partnership with the U.S. Department of Housing and Urban Development (HUD), EDA examined specific challenges faced in urban communities and identified best practices in supporting urban economic development. EDA also worked with the Bureau of Indian Affairs to determine how development activities on tribal lands could be best supported. EDA also entered into partnerships with the Department of Defense’s Office of Economic Adjustment (OEA) and the Appalachian Regional Commission (ARC), key partnerships that still are operational today. The results of these partnerships culminated in a number of informative research reports.
By the 1990s, EDA’s work increasingly focused on supporting economic clusters, Economic Development Districts (EDDs), and the newly developed University Centers (UCs) that were started in the 1980s. Through partnerships with the EDDs and the UCs, EDA worked to support activities that helped local communities develop and implement long-term, locally-owned regional economic development strategic plans.
Under the current Administration, EDA has built on its rich history by more clearly promoting innovation and competitiveness in order to drive economic development initiatives in regions across the country. Rather than focusing on emphasizing a single program, the agency uses its interconnected portfolio to provide flexible tools that enhance community capacity. During this period, infrastructure investments have been redefined such that both hard and soft infrastructure projects are equally prioritized and supported to advance a region’s overall development ecosystem. And, in the current fiscal environment where federal funding is being stretched, EDA continues to build on its long history of collaborating across federal agencies through inter-agency challenge competitions, thereby advancing the Administration’s goal of breaking down siloes and better leveraging federal funds to make more of an impact in local communities.
Today, EDA remains the only federal agency with economic development as its exclusive mission. As the profession and concept of economic development has evolved, so too has EDA’s approach: EDA continues its dual focus of supporting effective economic development outcomes through its various grant programs, while also leading the broader federal economic development agenda. This dual focus means EDA’s work is not only dedicated to supporting effective grant-making in the current climate, but also focused on constantly learning and evolving to improve processes, operations, and policies to ensure that both the agency and the broader federal government are positioned to advance economic development in the future. In short, EDA’s growth and evolution have ensured that it remains relevant, prepared, and capable of efficiently and effectively advancing its mission and goals. EDA continues to work collaboratively with other federal agencies, economic development organizations, state and local entities, and Indian Tribes to support the realization of economic prosperity in distressed regions across the nation.
a Public Works and Economic Development Act of 1965, As Amended (42 U.S.C. §3121), SEC. 2(a)(3).