UNIVERSITY PARK, Pa. -- If Pennsylvania's rural communities are to stem the tide of fiscal distress and remain economically vibrant, a new, place-based approach to rural policy is needed, according to a new report prepared by researchers in Penn State's College of Agricultural Sciences.

The report, "Strengthening Rural Pennsylvania: An Integrated Approach to a Prosperous Commonwealth," was one of three independent studies on the fiscal health and economic outlook of Pennsylvania released March 25 by the Brookings Institution, in collaboration with Penn State, the Pennsylvania Economy League and the Campaign to Renew Pennsylvania.

"Despite a variety of state and federal initiatives to assist rural communities over the past several decades, many rural areas continue to struggle with economic, social and environmental decline," says Theodore Alter, professor of agricultural, environmental and regional economics and co-author of the Penn State study.

"We have never developed a coherent, integrated rural-policy framework at the local, state and federal levels," he says. "To enhance community and regional competitiveness, we must identify features that distinguish places from one another and harness these differences to foster sustained growth and development."

Such a place-based policy is more holistic than traditional strategies, Alter explains, focusing on the broad array of social, economic and environmental attributes that can be mobilized to improve quality of life. "Place-based development emphasizes the need for municipalities to pool their resources and create a unique niche in the global economy," he says.

Among the report's conclusions:

* Rural policy must embrace complexity. "Rural and urban Pennsylvania are economically, environmentally, politically and socially interdependent parts of a larger system," the report states. "This recognition entails that a wide range of policies must be analyzed for their impacts on rural people and places." At the local level, such policies and programs must identify and strengthen the relationships between seemingly disparate issues -- such as economic development and environmental protection -- and develop plans that build on these connections. Such integration will require greater cooperation across municipalities, agencies, and the public and private sectors.

* Communities must leverage local assets to sustain economic development. This entails thinking and acting regionally, identifying indigenous assets, matching assets with an existing or emerging niche in the global market, making investments to capitalize on these assets, and fostering local entrepreneurship. "In this scenario, regions will compete in the global market but not with each other for the same pool of job opportunities," Alter says. "Instead, they will offer unique products or services matched to regional assets."

* Regions must foster leadership and local capacity. Leadership development must simultaneously build individual skills and foster community capacity, according to the study. Local leaders need to be able to build coalitions based on overlapping interests and mutual benefits, often across political jurisdictions. Capacity-building may require an infusion of resources, as well as partnerships with colleges, universities and other institutions that can provide expertise and guidance around such issues as economic analysis, regional planning, workforce development and business start-ups. In addition, investments in transportation, municipal and communications infrastructure are essential.

As part of the study, the researchers held listening sessions in five communities representative of rural Pennsylvania's diversity: Kutztown area (Berks County), Mifflinburg area (Union County), Milford area (Pike County), St. Marys area (Elk County) and Waynesburg area (Greene County). Local leaders from the public and private sectors were asked to identify issues important to their area's future prosperity, assets available to address these issues and what the community needs to take advantage of these assets.

Among the issues identified in all five communities were lack of inter-municipal coordination and cooperation, lack of jobs that pay a living wage, out-migration of young people, an aging population and an inequitable local tax structure, particularly the real-property tax. "None of these issues can be addressed without adequate funding for local services, facilities, education and workforce development," says report co-author William Shuffstall, senior extension educator in agricultural economics and rural sociology.

"A declining economic base in many older rural communities increases the tax burdens on remaining businesses and residents," Shuffstall says. "When residents can't find living-wage jobs, real-property and other local taxes become even more onerous. As municipalities are forced to raise taxes, attracting and retaining business and industry becomes more difficult, leading to a downward spiral of fiscal distress." He says listening-session participants emphasized the interconnectedness of these issues and stressed the importance of a more holistic way of addressing problems.

Local leaders in all five communities cited their areas' natural resources and related amenities, work ethic, sense of community and quality of life as unique assets that can be mobilized to address challenges. According to participants, policy changes that are needed to take advantage of these local assets include a shift away from unfunded mandates imposed by state and federal governments; greater regional cooperation and collaboration among local governments and between the public and private sectors; more public and private investment in infrastructure such as roads, public transportation, water and sewer facilities, and broadband network deployment; and a greater voice for rural Pennsylvanians in the state's public policy-making processes.

Other Penn State researchers involved in the study were Jeffrey Bridger, senior research associate in agricultural economics and rural sociology; Jill Findeis, professor of agricultural, environmental and regional economics and demography; Timothy Kelsey, professor of agricultural economics; A.E. Luloff, professor of rural sociology; and Diane McLaughlin, associate professor of rural sociology and demography.

This report and companion studies by the Brookings Institution and the Pennsylvania Economy League are available on the Web at http://www.renewpa.org.

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EDITORS: Contact Theodore Alter at 814-863-8640 or by e-mail at talter@psu.edu. William Shuffstall can be reached at 814-865-5665 or by e-mail at shuffy@psu.edu.

Writer/editor: Chuck Gill 814-863-2713 cdg5 @psu.edu