Local government systems in Canada originated as a response to the settlement pattern largely dictated by proximity to natural resources, access to markets, as well as influences from Europe (Tindal and Tindal, 2004). Given the rudimentary forms of transportation and communication from the British government at the time, there was a need to have some form of local entity handling day-to-day affairs. This form of local government was imposed on Indigenous territories, disposing Indigenous peoples (Prusak et al., 2016). The British North America Act (1867), which established Canada, stipulated local governments were not to serve the needs of local residents, but merely an administrative extension of the province. Isin (2003, p. 2) notes two key aspects about local governments emerging from this act:

While the role of local governments continues to evolve in Canada, Isin’s statements about the legislative responsibilities for local governments remain the same. The ability for local governments to operate as democratic institutions in Canada—to be accountable and responsible to their constituents—is flawed given their statutory and regulatory requirements within their different provincial government domains. Local governments must balance their ability to deliver services, manage property and assets, and meet the demands of residents while retaining a positive relationship with their provincial government. Rural local governments in particular are at higher risk, where their smaller populations are paired with less capacity, few resources, extensive infrastructure demands and often large geographical areas, where a large proportion of their budget is sourced from provincial transfers (Ansell et al., 2021; Martin et al., 2012).

Uptake in neoliberal policies over the past decades has contributed to many challenges local governments face. In the era of neoliberalism, federal governments have been shrinking the size of the public service, as well as devolving various responsibilities to the provincial level (Lobao et al., 2018). Subsequently, many provinces have followed suit, moving provincial responsibilities to the local level (McBride and McNutt, 2007). Rural local governments are particularly at risk, with limited capacity and a declining and unstable resource base (Shearmur and Poirier, 2017). Canadian local governments have become increasingly responsible for larger portions of infrastructure projects, wastewater services, flood risk management, and housing, and yet the devolution of capacity has not occurred at the same rate nor scale as the devolution of these new responsibilities (Barrett and Vodden, 2022; Valentina and Putera, 2025).

There are three dominant literatures in the context of economic development in rural local governments in Canada: Staples Theory, Evolutionary Economic Geography (EEG), and New Public Management (NPM). These concepts have impacted the evolution of economic development for rural local governments, which has historically been influenced by a series of waves over a period of decades. It is important to examine these dominant literatures beside the nascent literature of New Localism. This following section highlights how rural local governments have been historically influenced by these waves and provides evidence that a new wave may be approaching in the form of New Localism.

Prior to World War II, federal government activities to promote rural economic development focused on macroeconomic level theory grounded in export-led growth and that economies are developed by exporting raw, natural resources (Innis, 1933). Innis used Canada as an example and argues that the country’s economy of exporting exploited natural resources has shaped its culture, history, and political economy as raw commodities, such as fish, fur, lumber, and minerals were shipped from the “periphery” or hinterland to the “core” or heartland (Weaver and Gunton, 1982; Argent, 2017; Millard and Tronrud, 2018).

In practice, Staples Theory often led to a heavy dependence on few, largely European markets and a reliance at the local level on external forces beyond their control (Barnes and Hayter, 1994; Halseth and Sullivan, 2003). This resulted in the “Staples Trap,” a dependency on a single extractive resource that generates pervasive impacts on the local economy as noted by Innis and others (Hutton, 2002; Millard and Tronrud, 2018). As a result of the Staples Trap, rural economies are truncated at the local level. Rather than relying on multiple sectors for diversification, there is minimal processing and value-added, resulting in few complex input–output relationships and minimal diversity in economies. This also results in a continuing high employment dependency on natural resource industries and resulting vulnerability to external decisions and commodity markets (Argent, 2017; Millard and Tronrud, 2018). Scholars have suggested that the Staples Trap remains pervasive in Canada today, as well as in other Commonwealth nations, such as Australia (Carter, 2018).

EEG literature focuses on rethinking path dependency on traditional regional economic drivers. EEG was initially established to connect evolutionary economics with economic geography and is used to provide alternative explanations for differences in regional growth from other economic development theories (Boschma and Frenken, 2006; Boschma et al., 2017). EEG provides a geographical lens on the sets of embedded routines—the organizational skills, tacit knowledge, and/or innovative processes—of local governments that are typically difficult to codify but significant for New Localism (Boschma and Frenken, 2006). EEG also accounts for the space and time in which changes in local areas take place, and how they innovate and transition to path renewal at different paces (Plummer and Tonts, 2013). EEG has accounted for innovation and endogenous potential and highlighted that routines are unique and place specific. Further, it highlights that an “explanation to why something exists intimately rests on how it became what it is” (Dosi, 1997, p. 1531). Here, EEG prioritizes path-dependent processes given how the past inherently impacts the probability of future scenarios. Canadian scholars have used EEG as a framework in rural settings, with research examining natural resources development (Halseth et al., 2014) and tourism sector development (Brouder, 2014, 2017).

In addition to Staples Theory and EEG, NPM is an important third concept influencing rural local governments in Canada. In part due to a critique of the Westminster system, NPM was developed to move away from traditional models of public administration (Rhodes et al., 2009). In the 1990s, NPM was considered the gold standard for public administration for central governments (Farazmand, 2006). It was established during a period where governments emphasized smaller public sectors and placed greater emphasis on private sector practices, thus incorporating various corporate and financial management techniques across government.

Considering NPM as part of the public administration context in this study helps situate the reality in which local governments operate. Since the 1980s, delegation of responsibilities to lower levels of government has occurred in various ways despite their limited capacity to effectively address the new roles required of them. The scale of these devolved responsibilities did not occur at the same scale as the devolution of resources or power, providing further demands and fiscal and human resource pressures on rural local governments (Breen et al., 2019).

An understanding of NPM and its influence can help conceptualize the potential of New Localism for rural local governments in Canada. In both literature and practice, New Localism was initially used to describe the shift towards decentralizing political power, where local governments are compared to regional and national governments and considered less bureaucratic, more efficient, and where local councillors are perceived to be more accessible to their constituents compared to other layers of government (Corry and Stoker, 2002; Lowndes and Sullivan, 2008). The concept of New Localism emerged as a response to address what was happening at the local level as a result of devolution of powers (Goetz and Clarke, 1993). New Localism was established in part as a response to top-down hierarchical approaches to local development, with a focus on governance and community collaboration (Hettne, 1999; Katz and Nowak, 2017; Scott, 2016; Valentina et al., 2025), which may have encouraged entrepreneurialism in rural local governments.

The systematic review of literature follows the methods outlined in the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach, which has been used in reviews conducted by Breen et al. (2021), among others. Specific steps of the systematic literature follow best practices noted by Siddaway et al. (2019) and is similar the methodology and layout of systematic reviews of literature in other social science research (Bechard et al., 2024; Boman and Rosenberg, 2024).

The previous discussion highlights the apparent common characteristics of Staples Theory, EEG, and NPM relevant for rural economic development. No formal study articulating the interconnection of these three concepts, nor of its potential overlap with New Localism is available. This is despite the prevalent use of all four of these concepts within the academic discourse on local government and development. Hence, the objective of this review is to determine what common key characteristics of rural economic development within the nexus, its overlap with New Localism, and its potential conceptual value for rural economic development led by local governments.

As identified as a best practice by Siddaway et al. (2019) to ground truth findings, two databases were selected for the search: Web of Science and Scopus. Scopus is a database that has been used by other geographers (Breen et al., 2021) whereas Web of Science has a significant repository of social science literature. These two databases also have the tools to facilitate a systematic review of literature effectively. The dates of the search ranged from January 1, 1991, to December 31, 2022. This time range represents the emergence of NPM, captures the main developments of the EEG literature, and captures the recent writing of Staples Theory. The systematic literature search utilized a series of search terms featuring the four core concepts this review is exploring and the Boolean connectors used to obtain other relevant information while retaining the integrity of the key concepts (Table 1). Forward and backward citation chasing was not utilized.

As it appeared unlikely that many sources would emerge with the requirement of all four key terms search permutations with various combinations were used, including:

Lastly, inclusion and exclusion criteria were developed. Given the potentially limited literature based on the search terms, research featuring both urban and rural governments in all countries were included. Relevant peer-reviewed conference proceedings were also considered. Articles featuring New Localism via the New Labour in the United Kingdom movement were omitted, however, as New Localism in this context differs from the purpose of this study. In addition, while articles using acronyms from EEG and NPM were included, however, the abbreviations of EEG and NPM representing different meanings were omitted. With further consideration to eligibility criteria, there was specific focus on EEG, NPM, and Staples Theory literature since 1991 given the significance of the Hood (1991) article on NPM, while recognizing much of the EEG literature did not begin until early to mid-2000s). Staples Theory was established in the 1930s, however, the timeline of approximately 90 years is too extensive for this study. Eligible articles will represent literature focusing on economic development; literature focusing on local governments—both rural and urban—from January 1, 1991 to December 31, 2022, in the English language.

The primary author led the literature search, with guidance from a research team (including the secondary author). Potential biases in this approach were mitigated through two strategies. First, the approach for conducting the literature review, codes, and coding process were reviewed by the research team through a series of meetings. Second, an initial assessment of a random sample of articles from the literature search was reviewed by the authors and research team to determine if the eligibility criteria and search terms warranted further review. No revisions were required, and as such a complete search of the literature was conducted. The identification of literature involved two stages: (i) an initial review by title and abstract of each source to determine if it met the eligibility criteria, and (ii), a thorough review of all articles meeting the eligibility criteria.

A hybrid system of both closed-coding and open-coding was utilized. A preliminary list of overlapping key characteristics for Staples Theory, EEG, and NPM were identified from the literature and were used as the basis of the close-ended codes (see Table 2). An initial list of 10 closed code terms was utilized. Once the initial closed-coding process was complete, an open-coding process began illuminating key themes that were not initially identified. Through the open-coding process, four additional codes emerged that were relevant for the study. Microsoft Excel was used to maintain a complete repository of the coding throughout this project. It is recognized that several of these codes have many similarities and interconnections. The labelling of such codes were identified by how they were articulated in the literature.

As identified in Table 3, when searched individually, thousands of articles from EEG and NPM resulted in each database, while the results for Staples Theory and New Localism were lower. In several instances, such as when combining Staples Theory and New Localism, there was no literature found, nor were there any articles that identified all four concepts. Given that, connecting the concepts for the search reduced the number of eligible articles from over 100,000 to the 100 s.

A rigorous process was undertaken to determine which articles remained relevant for this study. Many articles initially identified were removed from consideration for three reasons. First, many of the articles that were categorized as either EEG or NPM were not actually used in the correct connotation for this study. Examples include referencing economic development but not in light of EEG or highlighting a new “public management” but not the concept of NPM. There were also many articles that had either EEG or NPM in the title but referenced concepts outside the purview of the study. Second, there were many articles that overlapped between the two databases. As an example, 77 of the same articles were present in both the Web of Science and Scopus searches of EEG and NPM—only five of which were relevant for this study. Finally, most of the articles that resulted from the New Localism search were in reference to the New Labour movement, which was deemed to be outside the scope of this study. As such, two relevant New Localism sources remained for analysis. While these results may be perceived as a small sample size, it does align with similar sized sample sizes of other systematic reviews of literature in the social sciences (Hennink and Kaiser, 2022; Shaheen et al., 2023). Table 4 provides an overview of the literature selected for inclusion in this systematic literature review.

Beyond the quantitative results from the search, two qualitative characteristics of the literature reviewed are noteworthy. Despite the absence of local government in the search criteria, yet its relevance for the study, all 19 articles selected for analysis focused on local government as the object of their study. Further, 12 articles focused on both rural and urban governments to encompass the entire geography of a region (i.e., a state or country).

Second, the geographic representation of the findings was global and covered varying locations and scales. One article used the European Union as the geographic focus, with six articles focusing on European countries. Four articles selected the Canadian province of British Columbia for their geographic analysis. Three articles used different states in the United States for their research. Two articles focused on Australia as a whole, with another focusing specifically on the Australian state of Tasmania as well as one set of authors conducting research in New Zealand. The final article surveys all local governments in Israel. With respect to their emphasis on the various concepts and theoretical approaches that this study brings together, literature based in Canada and Australia used Staples Theory as the basis of their work, while much of the European literature focused on EEG, and the American and Israeli material focused on NPM and New Localism, which was expected given the contexts from which these ideas arose. Lastly, much of European literature focused on countries impacted by the Cold War, and how these concepts may have potential for their future prosperity. Table 5 provides a geographic breakdown of the included articles and its relevant concepts.

Lastly, the methodological PRISMA approach for identifying, screening, determining eligibility, and inclusion is noted in Figure 1.

One the most common themes across all articles was economic development, and the various ways it impacts (and is impacted by) local governments. Researchers suggested the current economic conditions of a community are influenced by the embedded social, cultural, and economic norms that have been historically present in a local area (Fløysand and Jakobsen, 2013). This impacts the ability of a local government to engage in exogenous or endogenous development, establish diverse policy tools, or incorporate entrepreneurial practices. Regarding these nuances, Reese (2014, p. 627) noted:

Older policy tools continue to be used by some local governments, such as making their community attractive for investment, or “smokestack chasing,” though there is increasing interest in more endogenous economic development policy (Stokan and Raleigh, 2018). Another policy tool that is becoming of increasing interest to local governments is investing in ways to enhance the quality of life for residents, whether that is new amenities, prioritizing greenspaces, or having affordable housing. There is also agreement that a human-based-capital approach can have positive impacts for economic development (Morgan, 2010; Reese, 2014).

Entrepreneurialism was touted by several researchers as having potential for economic growth in both rural and urban areas. Rather than focus on recruiting new firms, or seeking to expand existing firms, entrepreneurialism represents a shift to entrepreneurship, cluster development, and small business growth (Fløysand and Jakobsen, 2013). Other researchers suggested that entrepreneurial presence is an indicator of economic growth, with their study confirming there is a correlation between economic activity and local government entrepreneurialism (De Mattis et al., 2022). There was also consensus among various researchers that innovative governance arrangements are linked to both innovative public policy and entrepreneurialism (De Mattis et al., 2022; Morgan, 2010). Through EEG, it is demonstrated how innovative economic development policies range from new service delivery arrangements, new mechanisms for planning, and enhancing governance arrangements and collaboration (Morgan, 2010). Lastly, several researchers identified the role of local government in taxation and demonstrated the success of local governments to implement innovative tax structures for industrial development, in part with collaboration with the central government, to reap the best possible local benefits (Argent, 2013; Morgan, 2010; Reese, 2014; Ryser et al., 2019).

The literature noted that economic development occurs at varying scales, which aligns with changes occurring within EEG over different temporal and spatial scales (Markey et al., 2019). Scholars have suggested local and regional governments are the most appropriate level of government to lead innovative economic development policies (Dodescu and Chirila, 2014) as they are typically more agile in turbulent economies (Morgan, 2010). Political power at higher levels of government is focused on national development, narrowing in on urban areas as growth centres, limiting the ability for rural local governments to receive benefits from nation-led development (Argent, 2013).

Rampant structural changes have been occurring over the past several decades that have directly impacted rural local governments. These changes have occurred external to local governments but have also been internally led by local governments and have had a myriad of impacts for economic development. Authors such as Argent (2013) and Halseth et al. (2014) have identified the implications of central government’s role in a staples economy for rural local governments, which can lead, for example, to economic and political lock-in. Rural economies continue to be shaped by government policies which, in recent times, have removed economic benefits from local regions. Respecting these external changes, Markey et al. (2019, p. 25) noted:

Local governments can also lead structural changes for their communities. Much of the EU literature was related to governance changes in light of devolution, whereas the American literature has been related to strategic planning of communities, which may include evolution from previous forms of path dependency (Syamsir et al., 2025; Beeri and Yuval, 2015; Habuda et al., 2019; Wear, 2012). When considering public management structural changes, Beeri and Yuval (2015) suggested that New Localism is the superior form of public management compared to NPM; while under NPM central authorities have power over the future trajectories of local governments, New Localism allows local governments to lead strategic planning themselves.

Whether led by local government or external forces, structural changes have implications for economic development. Morgan (2010) links the influence of NPM to local governments leading economic development initiatives and outlines various uncertainties of economic development under the NPM model, such as the accountability of local government initiatives, performance-based incentives, among others, and subsidies provided to encourage development. There is potential to evolve beyond these approaches by employing new service delivery arrangements or working collaboratively with other entities. Morgan (2010) argues there is a correlation between innovative governance and management techniques and successful innovative economic development polices, where a strong presence of governance can lead to significant positive changes for economic development. Similarly, EEG can complement Staples Theory to break the path dependency that is present in local governments and assist rural areas to find new economies (Halseth et al., 2014; Markey et al., 2022).

Path dependency reinforces core-periphery dynamics that generate barriers for local governments within the periphery (Halseth et al., 2014; Markey et al., 2019; Ryser et al., 2019). Two key themes emerge from path dependency relevant to local economic development: (i) economic dependency, where peripheral regions are subject to the market demands of the commodity they are supplying, eventually resulting in disadvantages for the local government and economy in the long term as prices fluctuate and/or substitutes or alternative suppliers are found, and (ii) truncated development, where local governments struggle to develop other economic sectors and are instead reliant on the vulnerability that comes with depending on a single sector in a global market (Halseth et al., 2014; Markey et al., 2019; Ryser et al., 2019).

As initially articulated by Innis, a “Staples Trap” creates vulnerabilities from exposure to an extractive resource sector based on systems implemented by local, provincial, and national governments (Argent, 2013). Specifically, the Staples Trap further permeates path dependency within communities, ranging from industry supporting local sports teams to having preferred candidates in political elections, making the Staples Trap more entrenched and it more difficult for local governments to diversify local economies (Argent, 2013). Often, the result is local governments providing incentives to retain the existing industry, which then becomes an expectation from industry of the local government which is challenging to break (Reese, 2014).

Various challenges are associated with path dependency as demonstrated by the case studies identified in this review. Path dependency results in unequal distribution of wealth and capital, and uneven benefits from the core compared to the periphery. Further, in most cases, any temporary labour that resulted from a staples project will likely dissipate once the project is concluded (Argent, 2013). Reliance on extractive resources presents further challenges such as economic (Argent, 2013; Halseth et al., 2014; Markey et al., 2019) and socio-cultural (Fløysand and Jakobsen, 2013) lock-in, which is discussed in further detail in a later section. Argent (2013) also noted establishing path dependency relationships is a colonial approach to economic development, where the British came into places such as Canada, established colonies and built infrastructure, only to remove the resource and send the benefits back to the United Kingdom resulting in systemic consequences for Indigenous people that continue into the present day.

Despite the challenges of path dependency, some researchers were optimistic at the potential to break path dependency. Particularly, combining EEG and Staples Theory provides a way to envision the creation of new pathways, vis a vis new industries, technologies, or clusters local governments can lean into (Markey et al., 2019, 2022). Case studies suggested the EEG framework has helped break lock-in from local governments dependent on sectors such as oil, gas, and forestry (i.e., path reversion) whereas in other cases, while the primary commodity remains a key economic driver, EEG has changed the future trajectories of a local government (Markey et al., 2022). When discussing breaking path dependency, Ryser et al. (2019) noted “local governments can leverage their rights, invest in research, and seize the agenda in underdeveloped senior government policy environments” (p. 39).

Lastly, Nel et al. (2019) discussed path dependency in the context of New Localism. These researchers note that Kiruna, Sweden was successful in breaking path dependency from the mining industry, moving onwards to different sectors. While Nel et al. (2019) believe this may be the exception, under New Localism where enhanced capacity is provided at the local level, breaking path dependency was successful.

Comments on place and space primarily identify that geography matters. Staples Theory, EEG and NPM articles note the practices and idiosyncrasies of their individual cases are subject to embeddedness in relation to their particular places, networks, and power structures, as well as the way in which individuals, industry, and levels of government interact within the global economy and consequent impacts for local economic conditions (Fløysand and Jakobsen, 2013; González and Gale, 2020; Habuda et al., 2019; Morgan, 2010; Wear, 2012). In addition to physical and social-political geographies, the history of places also matters, as the policies and practices of the past have led to current economic conditions, returning to path dependency (Fløysand and Jakobsen, 2013), as well as the presence and utility of other place-based assets (Ryser et al., 2019).

New Localism researchers also put relevance on place and space. Nel et al. (2019) identified how devolution has shifted power, functions, and resources to the local level, resulting in the development of new local spaces. Given this, researchers suggest New Localism highlights the importance of social capital and place-based leadership, which they believe will build the future resiliency of rural local governments (Beeri and Yuval, 2015).

Devolution is a primary theme in New Localism and is also evident in both the NPM and EEG literature. Devolution is related but not synonymous with decentralization. Typically, devolution refers to the transferring of statutory powers between levels of government, while decentralization is a public management strategy that refers to changing the level of public administration and service. There are competing ideas behind devolution and decentralization. Decentralization can occur because local governments are in the best position to deliver services because strategically it is believed that the local level is the most effective level of government for specific powers and responsibilities (De Mattis et al., 2022). In North America and in other areas, however, this view differs. As Ryser et al. (2019) suggest, governments frequently download responsibilities such as economic development to local governments, while failing to provide the resources or additional jurisdictional authority for them to carry out their duties effectively.

Hoffman (2018) highlights the experiences of devolution and government reform that occurred within EU countries. Significant government reform (including municipal government reform) has occurred since 1991, which has often coincided with practices of NPM. The primary responsibility devolved in the EU to local governments focuses on economic development, which, in most cases, was considered unsuccessful. The only successful example identified by Hoffman (2018) was in Poland, where the central government only allocated responsibilities that the local government had capacity for. Despite the capacity challenges faced by local governments attempting to facilitate economic development, Hoffman (2018) suggested devolution triggered the creation of new, innovative policy tools and service delivery arrangements out of necessity. This was done through a variety of avenues, but predominantly out of collaboration with actors within the local area. Hoffman’s (2018) claims local governments are the best level of government that can employ innovative public management techniques and develop innovative policy tools.

Nel et al. (2019) suggest the benefit of New Localism, which relies on devolution to empower local governments, is that the local level gains authority to make decisions that reflect local labour, culture, and resources. Such a public management framework challenges traditional models of governance and reduces local-central tensions pertaining to devolution, given its ability to equip local governments to make decisions for the betterment of their individual socioeconomic prosperity (Beeri and Yuval, 2015).

The articles outlined differences in innovation between rural and urban areas. Innovation is often measured through urban-centric indicators, which Fløysand and Jakobsen (2013) believe does not capture the level of innovation nor the specific characteristics of the innovation processes that take place in rural areas. Innovation occurs at an incremental albeit important rate in rural areas, and it is often a result of establishing social networks and sharing knowledge and new ideas (Fløysand and Jakobsen, 2013). These networks and the innovations that result tend to be relatively more important in rural compared to their urban local government counterparts given the distinctive culture and spatial dynamics of rural areas (Wear, 2012). Rural innovation tends to rely on knowledge exchange, and opportunities for place-based development (Wellbrock et al., 2013).

Path dependency emerged as another primary theme within the rural code which, given the nature of natural resource industries, is a distinctively rural issue, though as Markey et al. (2019, 2022) identified, there is potential to break that dependency in rural areas through EEG. There are also significant implications of path dependency for rural infrastructure. For example, the lagging infrastructure to attract industrial development and the demand on infrastructure when facilitating such developments that add pressure to archaic and aging infrastructure serves as a reminder that the industrial project and the benefits for the community associated with it are now largely gone (Markey et al., 2019, 2022). Rural local governments may be able to diversify their economies through the practices of EEG. In many cases, however, this is contingent on political will and the capacity of local government to facilitate economic development (Markey et al., 2022).

Lastly, Nel et al. (2019) outlined predominantly positive implications New Localism may have on rural local governments. New Localism has an opportunity to fulfill the capacity gap of rural local governments by first addressing the local leadership capacity and assessing the potential for endogenous development. Nel et al. (2019) believe that there are higher levels of community-based social capital in rural communities, and so during periods of economic restructuring, local businesses are more willing to be a major contributor to the welfare of the community.

The literature review reiterated that agency is a common theme within the EEG, NPM, and New Localism literatures, as citizens desire more power in the decision-making process of the state. This can be mobilized through a variety of avenues, such as a social network, where the knowledge generated, and the reciprocal trust built among actors within a network make citizens more comfortable working together towards common objectives (Fløysand and Jakobsen, 2013). Commonly, governments would also enact partnerships between citizens and relevant stakeholders to influence the decision-making process, though some researchers believe there is a lack of accountability for governments in partnerships to incorporate citizen perspectives in policy (González and Gale, 2020).

Governance is a key aspect of agency and was identified by several researchers. Stokan and Raleigh (2018) identified the power of governance when utilized by public administrators, as it gives potential for efficiency, synergy, inclusion, and empowerment if community buy-in is achieved when implementing a program. Specifically, multi-level governance has potential to connect all levels of authority within a decision-making process (González and Gale, 2020), though as Wellbrock et al. (2013) explain, it can also be used to mask the reality that most power remains with the central government.

Scholars argued that agency can be used as a tool to facilitate economic development. As noted by Stokan and Raleigh (2018, p. 113): “community economic development implicitly assumes a democratic political system in which people have an opportunity to express their preferences.” Morgan (2010) outlines how meaningful participation among community stakeholders can assist in strategic planning for a local government’s economic development endeavours. Further, collective agency is needed for successful place-based development, yet more work is needed for governments to develop more collaborative modes of governance (Argent, 2013; Wear, 2012; Wellbrock et al., 2013).

Agency is also a key component of New Localism, which focuses on the perspectives of local individuals on the decision-making process and everyone has a say, whether they are an elected official or another actor (Beeri and Yuval, 2015). Beeri and Yuval (2015) believe New Localism can achieve social capital by bringing together actors working together for a common objective. Further, it is noted the community will develop bottom-up approaches to development and reject top-down interventions to their local government.

The literature review identifies both how local governments can facilitate entrepreneurial growth as well as how they can become more entrepreneurial in their actions. Researchers agree that there is an important role for local governments to facilitate networking between firms, institutions, and other levels of government to help support entrepreneurialism and subsequently economic growth (Fløysand and Jakobsen, 2013; Stokan and Raleigh, 2018). Other scholars provide evidence of the connection between facilitating entrepreneurialism and economic growth, and how local governments require innovative public policies to facilitate entrepreneurship (De Mattis et al., 2022). Examples of such policies are those which rely on alternative approaches to stimulate job creation and private investment, which often require place-specific solutions to contribute to economic development (Morgan, 2010).

Researchers also emphasized how local governments can be entrepreneurial. De Mattis et al. (2022) suggest that the governance of local government can build the presence of entrepreneurialism in the development of local economic development policies. This is pressing in times of a turbulent economy, when there is a need to be more entrepreneurial in the administration of local government and their economic development endeavours (Morgan, 2010). There is evidence entrepreneurial local governments promote private investment, lead job creation and training, and facilitate entrepreneurship, particularly in rural areas (Morgan, 2010). This is, in part, related to the unique culture and social capital present in rural communities (Olcina et al., 2020). When discussing New Localism, Nel et al. (2019) suggest in periods of devolution, rural local governments can become entrepreneurial and lead endogenous development and resilience.

Politics was another key theme that emerged from the coding, particularly as it pertains to its influence on economic development and strategic planning. Indeed, researchers agreed that economic development is the role of the government (Morgan, 2010). Stokan and Raleigh (2018) note that community economic development can be fostered in a democratic political system where citizens have the ability to openly express their opinions. Such governments rely on taxation, however, and both taxation (Olcina et al., 2020) and tax incentives (Reese, 2014) are seen as being political in the context of attracting development. While these are common practices of politicians, Argent (2013) identified how this can become a risk when individuals with corporate control over key economic sectors extend that influence to political power.

There are opportunities for politics to be used for purposes of collaboration and governance (Wellbrock et al., 2013) and enhance the role of place and place-based assets within a community (González and Gale, 2020). However, many governments fail to effectively do this, where basic political expectations are not fulfilled (Habuda et al., 2019) and politics can hamper institutional reform that may benefit local governments (Wellbrock et al., 2013).

Due to devolution during the neoliberal era, local governments are forced to become innovative to continue to offer services and meet growing expectations. This is, in part, related to EEG, where institutions and local governments are required to be flexible and innovative (Halseth et al., 2014). Researchers suggested this can be done in three primary ways: regional innovation systems, innovative public policy, and innovation as knowledge.

Fløysand and Jakobsen (2013) label regional innovation systems as place-based development on specific industries that involve collaborative and innovative approaches to enhancing regional opportunities for the sector. This is done, in part, with the recognition that the region is the superior scale to modernize innovative processes (Dodescu and Chirila, 2014; Fløysand and Jakobsen, 2013; Habuda et al., 2019; Morgan, 2010).

Morgan (2010) also identified the significance of innovative public policies led by local governments for economic development. This begins with the basis of governance and ensuring that local governments are positioned to enact innovative policies in the first place. Innovative policies may include investing in quality-of-life amenities making their communities a more attractive place to live, to programs that can benefit companies and their workers.

Lastly, collaboration was identified as an important tenant for rural innovation (Habuda et al., 2019). This was attributed to the significance of knowledge exchanges in rural areas, and the propensity to collectively solve economic barriers facing the community, such as enabling economic diversification (Fløysand and Jakobsen, 2013; Wellbrock et al., 2013).

To summarize the results from the analysis, Table 7 provides an overview of key findings from each of the 10 themes.