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Governing Massachusetts: Uneven Development and Politics in Metropolitan BostonAuthor(s): Cynthia Horan and Andrew E. G. JonasSource: Economic Geography, Vol. 74, Special Issue for the 1998 Annual Meeting of theAssociation of American Geographers, Boston, Massachusetts, 25-29 March 1998 (1998), pp. 83-95Published by: Clark UniversityStable URL: http://www.jstor.org/stable/144305 .

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Governing Massachusetts: Uneven Development and Politics in Metropolitan Boston*

Cynthia Horan

Department of Government and African American Studies Program, Wesleyan University, Middletown, CT 06459

Andrew E. G. Jonas Department of Geography, University of Hull, Hull HU6 7RX, U.K.

Abstract: This paper analyzes governance and politics in Massachusetts in the 1980s and 1990s. Using a regulationist analysis of the "mode of social regulation" as well as urban regime theory's emphasis on governing coalitions, we show how spatial restructuring has transformed governing coalitions, governance structures, and local politics. Empirically, we note the importance of the Greater Boston area to the Commonwealth's recent economic recovery but point to the lack of regional governance capacity. Political fragmentation and territorial conflict continue to frustrate the development of more coherent governing coalitions and governance structures at the state, regional, and local levels. Theoretically, we stress how conditions internal to local economies contribute to their structural incoherence. This contrasts with the regulationist emphasis on external conditions, including globalization and the failure of national states to manage uneven development.

Key words: regional governance, Massachusetts, Boston.

In the past two decades, the fortunes of local economies in industrialized countries have changed dramatically. Capital flight, the global integration of production, and the end of national urban policies seem to have undermined the capacities of local governments to secure the preconditions for economic development. Many commentators now agree that effective policymaking or governance requires greater cooperation between government and non- government actors, including businesses, labor unions, community groups, and non- profit agencies. In the United States, poli- cymakers have further emphasized that reorganizing and strengthening metropolitan or regional governance is necessary to create more competitive local economies (Cisneros 1995; Bollens 1997).

This paper examines governance in Massachusetts and its most important eco-

* We would like to thank the journal's editors and anonymous reviewers for their helpful comments on earlier versions of this article.

local politics, uneven development,

nomic region, metropolitan Boston. We believe that investigating this particular region is instructive for broader debates about local governance. First, it requires us to consider governance within the context of economic restructuring, the very context that has made "governance" such a salient

policy topic in the first place. Second, it

challenges a conventional policy narrative.

Despite the accounts of skeptical acade- mics (Ferguson and Ladd 1988), many commentators still see the so-called "Massachusetts miracle" as a model of economic growth, public-private cooperation, and consensus politics-that is, as a model of governance. Indeed, the former secre-

tary of the U.S. Department of Housing and Urban Development recently offered

metropolitan Boston as an example of effective governance in the 1990s (Cisneros 1995, 13-14).

This article offers a different perspective. We argue that the important political legacy of the 1980s is not consensus but conflict. Massachusetts' current economic

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ECONOMIC GEOGRAPHY-AAG SPECIAL ISSUE

recovery has occurred without either sig- nificant public-private cooperation or activist state government. Further, we find little evidence of effective policymaking at the regional level even though the Boston metropolitan economy has led Massachu- setts' economic revival. Nevertheless, while growth has so far not required governance, growth is, we propose, creating governance problems, and it is the politics of governance that we emphasize here.

Our analysis of governance is informed by "reconstructed" versions of regime and regulation theories (Lauria 1997). Regime theory argues that the capacity to govern a local economy is not determined by the dynamics of a globalized capitalism nor is it reducible to winning elections. Rather, governance involves overcoming the division of labor between state and market actors in the locality (Elkin 1987). Most regime scholars treat this task as essentially organizational: governing requires creating and sustaining a coalition of actors (or a governing coalition) who control key local resources (Elkin 1987; Stone 1989, 1993). Central to these coalitions are businesses dependent on fixed investments, local markets, and/or local knowledge (Cox and Mair 1988).

Recent versions of regime theory have broadened its focus beyond governing coalitions to the wider spatial context in which these coalitions exist and operate. Some scholars have made more explicit the links between changes in the spatial division of labor and the conditions under which governing coalitions form and fragment (Jonas 1992; Lauria 1994). Others have pointed to transformations in the function and policies of the state, including a shift in local politics from collective con- sumption to economic competition (Cochrane 1991, 1998; Cox 1993). More generally, whether they emphasize the spatial division of labor or central-local relations in the state, regime analysts increasingly pay attention to the changing contexts of local governing coalitions and to the nonlocal constraints on the governance of local economies.

In these newer versions, regime theory resembles recent regulationist approaches (Goodwin, Duncan, and Halford 1993; Jessop 1995, 1997; Lauria 1997). If in the past regulation theorists tended to see changes in local politics largely as a consequence of the crisis of Fordism, many scholars now view local governance as a terrain where various groups experiment with, and struggle over, different styles of political leadership and/or economic policies (Jessop 1995, 1997; Jonas 1996; Jones 1997). In contrast to conventional regime theory, regulationist approaches situate local governance explicitly within the dynamics of globalization, economic change, and, more recently, uneven development. Governance is not simply about mobilizing coalitions; it also involves creating and maintaining political and sociocul- tural relationships that sustain accumulation in local economies, such as interfirm networks of cooperation and information sharing (e.g., Saxenian 1994). In this perspective, local systems of governance can either achieve some sort of "structured coherence" (Harvey 1985, 139-44) in social relations of production and con- sumption-hence the idea of a local mode of social regulation (Peck and Tickell 1992)-or, conversely, they may fragment, resulting in economic crisis (and regulatory failure).

Whether or not, and why, either of these tendencies materializes remains a subject of debate. Harvey, for example, has argued that such coherence depends upon the for- mation of regional cross-class alliances- that is, it depends crucially upon local politics (Harvey 1985). Other scholars, examining regions prosperous under neoliberal governance in the 1980s but suf- fering economic crisis in the 1990s, stress the importance of globalization and national urban policies to local modes of social regulation (Peck and Tickell 1995; Florida and Jonas 1991). In general, while regulationist scholars acknowledge the significance of local governance, they rarely investigate how politics within regions con- tributes to it (Jonas 1997). Our analysis of

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GOVERNING MASSACHUSETrS

metropolitan Boston focuses on such

regional politics. It incorporates the coali- tional emphasis of regime theory, particularly the business role in coalitions, while locating coalitions within a changing spatial division of labor. For us, governance involves more than coalition building; as regulationists have proposed, it depends upon the capacity of local class and political interests to create effective and legiti- mate political structures and strategies in a wider context of uneven development.

Massachusetts Governance in the 1980s

Recent research has challenged many of the alleged achievements of the "Massa- chusetts miracle." The contribution of high-technology firms to the Common- wealth's overall economic performance now appears questionable (Barff 1992; Jonas 1996; Saxenian 1989, 1994). There is evidence that growth benefited only some sectors and social groups (Graham and Ross 1989; Harrison and Kluver 1989). In addition, we suggest that, rather than demonstrating progress toward more stable relationships of governance and economic regulation, Massachusetts politics in the 1980s became increasingly factionalized.

Even before Michael Dukakis's second term as governor started, the "miracle" economy was faltering. Non-high-technology manufacturing began to lose jobs in 1981 (Massachusetts Executive Office of Economic Affairs 1993), and, in 1986, after three decades of almost continuous growth, high-tech employment dropped as the region's computer industry lost its competitive advantage (Saxenian 1996). For a while, services employment grew, adding some 200,000 jobs in the last half of the 1980s (Graham and Ross 1989). Yet high-tech's decline was soon followed by the collapse of real estate and the closure of several regional banks, decimating the construction industry and many financial firms. From June 1989 to January 1992,

Massachusetts lost 401,000 jobs (U.S. Bureau of Labor Statistics 1989, 1992).

These economic problems were experienced unevenly across the state. Job losses in non-high-tech manufacturing sectors, such as paper products, metals and machinery, and chemicals, hurt older industrial localities, including Boston, Springfield, Worcester, and Pittsfield. Boston's manufacturing sector almost dis- appeared, declining to roughly 33,000 jobs by 1989 (Boston Redevelopment Authority 1992). By 1996, manufacturing accounted for 16.5 percent of private sector employment in Massachusetts (see Table 1), compared to 33.5 percent in 1970 (Jonas 1996).

The economic downturn shrank the state government's revenue base. As early as 1986, business studies revealed that state government revenues fell short of expendi- tures (Muehlmann 1987). By early 1990, Massachusetts' credit rating was Baa, the lowest for any state. Business groups recommended expenditure cuts and other austerity measures, including massive public sector layoffs.

But economic decline also reshaped business politics, which helped to prevent a "business" solution to the fiscal crisis. Two manufacturers' organizations-the Associ- ated Industries of Massachusetts (AIM) and the Massachusetts High Technology Council (MHTC)-waged especially bitter struggles with each other. Formed in 1915, AIM represented established manufacturing companies. Long a part of state government policymaking, it tended to adopt reformist positions and to work with the legislature and governor (Jonas 1996). MHTC, by contrast, was hostile to government and taxation. It relied on populist appeals and referenda to push through its aggressively neoliberal economic agenda. To solve the fiscal crisis, for example, MHTC introduced referenda to cut public spending by $1 billion. Such propositions were strongly opposed by other business groups, legislators, unions, and state and local employees and failed to become law. As a result of its hardline policies and the economic decline of its high-tech con-

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Table 1

Private Sector Employment by Selected Industries (in Thousands) Massachusetts Boston PMSA

December December December December 1989 1996 1989 1989

Total 2,696.5 2,697.9 1,676.1 (62.2)a 1,670.2 (61.9) Construction 116.5 96.6 65.3 (56.1) 53.5 (55.4) Manufacturing 546.6 445.5 276.9 (50.7) 219.9 (49.4) Transportation/ 133.4 134.0 83.6 (62.7) 83.8 (62.5)

Communications Wholesale trade 176.2 169.5 116.7 (66.2) 107.8 (63.6) Retail trade 575.2 554.5 328.6 (57.1) 311.7 (56.2) FIRE 216.5 212.9 155.6 (71.9) 157.3 (73.9) Services 930.6 1083.6 648.8 (69.7) 735.8 (67.9)

Business 156.1 215.2 117.1 (75.0) 158.3 (73.6) Health 265.7 325.7 164.1 (61.8) 198.8 (61.0) Education 132.8 137.9 104.1 (78.4) 108.4 (78.6) Social 66.9 79.4 40.1 (59.9) 46.8 (58.9) Engineering/ 100.8 109.8 81.8 (81.1) 88.7 (80.8)

Management Source: U.S. Bureau of Labor Statistics (1989, 1996). Note: Employment data is not seasonally adjusted. a Numbers in parentheses denote Boston share of Massachusetts total.

stituency, MHTC became increasingly marginalized. Although AIM's importance was strengthened by MHTC's demise, the deindustrialization of the 1980s devastated its membership base. To survive, AIM recruited services firms, in particular Boston-based financial institutions (Jonas 1996), but in the process its program became less coherent and it, too, lost political influence.

At the same time, the state government's fiscal crisis undermined Dukakis's electoral coalition. Throughout the 1980s, Dukakis had appealed to his base of workers, home- owners, public and private sector unions, higher education, and environmental organizations through activist government. Dukakis supported public investment in education, more socially equitable tax policies, plant closure legislation, and environmental clean-up in the boom years. He also drew support from business groups by endorsing reforms to workers' compensa- tion, seeking compromise on environmental policy, and investing in infrastructure.

Dukakis's electoral coalition disinte- grated in the late 1980s. In 1989, the Dukakis administration tried to raise local government revenues by altering Massachusetts' popular property tax limita- tion measure (Proposition 2 1/2). This attempt brought the administration into direct conflict with MHTC and Citizens for Limited Taxation, groups that had lobbied for the measure in 1980 (Loth 1989). Dukakis alienated business groups by elim- inating the investment tax credit. Unable to establish business or popular support for his fiscal policies, Dukakis was forced to introduce a series of temporary stop-gap measures, including an increase in the income tax (Mohl and Loth 1989).

In the midst of this fiscal and political disarray, in 1990 Massachusetts voters elected their first Republican governor in 16 years, William F. Weld. Promising to end the fiscal crisis and to create "entrepreneurial government," Weld used the Commonwealth's financial difficulties to achieve his probusiness agenda. As Democratic leaders in the legislature went

86



GOVERNING MASSACHUSETTS

along with huge reductions in social pro- grams (including a 22 percent cut in the welfare rolls), Weld transformed a $1 billion budget deficit in fiscal year 1990 into a $549 million surplus by FY1992 and a $1 billion surplus by FY1995 (Weld and Cellucci 1997; Massachusetts Taxpayers Federation 1997; O'Neil 1996). Central to Weld's supply-side governing strategy were massive tax cuts, notably the repeal of taxes on services, capital gains, and estates as well as reductions in manufacturing, mutual funds, and personal income taxes. Further, in the name of economic growth, Weld secured changes long sought by Massachusetts business organizations, including the elimination of many regula- tions, an estimated $1.7 billion reduction in

employer contributions to workers' com- pensation and unemployment insurance, and a quintupling of the research and

development tax credit.

Despite his popularity with the voters who reelected him in 1994 by the biggest margin in Massachusetts history, Weld never created a broad-based governing coalition to unite powerful interests in state government. Swallowing budget cuts in the fiscal crisis, Democratic legislative leaders later blocked government reorganization and fought to protect labor interests in unemployment insurance and a higher minimum wage. With most policy initiatives originating in the State House, business interests did little to push for state government overhaul or other policy initiatives beyond tax relief. Indeed, business executives and organizations split over key issues, among them Weld's unsuccessful bid for the U.S. Senate in 1996. Labor unions, though weakened by economic collapse, have mobilized more effectively recently-their votes and money were sig- nificant in Weld's Senate defeat (Butterfield 1996). This political instability is likely to continue in the wake of Weld's

resignation and in the face of a gubernato- rial campaign that threatens to splinter both political parties.

Weld has, of course, claimed credit for Massachusetts' post-1992 economic revi-

val. While many observers agree that lower taxes and a balanced budget matter-at least to restoring business confidence-

they typically see recent economic activity as due more to the ability of Massachusetts' financial, software, and new high-tech firms to compete in an improved national economy (Rimer 1997; Stein 1996c). Ironically, Weld's own economic development plan best suggests the limits of his

supply-side political strategy as economic policy. Released in 1993, the plan urged state government to "choose to compete" (to paraphrase its title) by adopting a more activist policy agenda. While not using the term "governance," the plan clearly under- stands governance, in particular certain types of state government interventions, as crucial to Massachusetts' economic future. Of interest here is the way in which the plan depicts the Commonwealth's economy as a set of regional economies in which state government intervention matters. More specifically, the plan urges state government to foster its regional economies by enhancing physical and social infrastruc- tures, by encouraging public-private and intergovernmental cooperation, and by lessening the spatial inequalities of private investment (Massachusetts Executive Office of Economic Affairs 1993). The remainder of this paper will point to the state government's weakness in all three of these areas in its most important economic

region, Greater Boston.

Uneven Development and the Changing Spatial Division of Labor

Defying most predictions, Massachu- setts' economy began adding jobs in 1992, and by June 1997 it had regained most of its post-1989 job loss' (U.S. Bureau of Labor Statistics 1989, 1992, 1997). As indi-

According to the U.S. Bureau of Labor Statistics, Massachusetts' employment reached a peak of 2,755,800 in June 1989. Since, as of this writing, the December 1996 report was the

87




cated in Table 1, almost all of this private sector job growth has been in services firms. Manufacturing lost 101,000 jobs since 1989, while services have grown by almost 154,000 jobs. Business, management, and social services, as well as health and education, account for 62 percent of that rise.

Although delineating Greater Boston's share of Massachusetts' employment growth is difficult because different studies define the region's spatial boundaries dif- ferently,2 no matter what the definition, the region clearly dominates the Common- wealth's economy. According to the U.S. Bureau of Labor Statistics, by December 1996, the Boston Primary Metropolitan Statistical Area (PMSA) contained 1.670 million private sector jobs, almost its December 1989 total; its share of state employment was, as in 1989, roughly 62 percent. Massachusetts business people and public officials regularly credit Greater Boston with triggering the state's revival. For example, the Boston Globe reported that 79 of Massachusetts' 100 top-perform- ing companies in 1996 were located in the Boston PMSA ("Eighth Annual Globe 100" 1996). Labor market areas more distant from Boston, such as Springfield, Fitch- burg, and New Bedford, have not recov-

most up-to-date and detailed report available, December 1989 employment figures are used in Table 1 to reduce the likelihood of possible seasonal variations in employment.

2 The U.S. Bureau of Labor Statistics reports data by labor market areas in Current Employment Statistics; the Bureau of the Census, by counties in County Business Patterns. Current Employment Statistics defines the Boston Primary Metropolitan Statistical Area (PMSA) as the city of Boston and parts of six counties, including two towns in New Hampshire-that is, much of the area within Route 495 except for the labor markets of Brockton, Lowell, and Lawrence. A five- county definition of Greater Boston (Essex, Middlesex, Norfolk, Plymouth, and Suffolk) would be larger in area, since it includes most of the Brockton, Lawrence, and Lowell PMSAs.

ered to the same extent (U.S. Bureau of Labor Statistics 1989, 1996).

Especially important is Greater Boston's continued preeminence in the sectors dri-

ving the recovery (Massachusetts Executive Office of Economic Affairs 1993; Rimer 1997; Stein 1996a, 1996b, 1997a). As demonstrated in Table 1, with 62 percent of Massachusetts' employment, Greater Boston is home to 73.5 percent of its business services jobs, 78.6 percent of its education jobs, and 83.8 percent of its

engineering and management jobs, as well as 73.9 percent of its finance, insurance, and real estate (FIRE) jobs. As the table shows, of the 59,100 increase in business services jobs statewide, the Boston PMSA accounts for 41,200 jobs, or 69.7 percent. Similarly, the Boston PMSA claimed almost all the rise in education and man-

agement employment and posted an increase in FIRE employment despite its

drop statewide. A more detailed accounting of services

employment, though available only through 1994 and reported by counties, not PMSAs, shows that today, as in the 1980s, the suburbs house the region's software and high-tech manufacturing and services

employment, as well as many large corporate headquarters; the city of Boston is the location for FIRE positions, law firms, universities, and research hospitals (Adams 1997; Boston Redevelopment Authority 1996). With almost 27 percent of five-

county metropolitan employment in 1994

(nearly identical to its 1980 share), Suffolk

County3 accounted for 68 percent of met-

ropolitan legal employment, 49 percent of its FIRE employment, 38 percent of its health care employment, and 32 percent of its education and engineering and management employment. Just 8 percent of com-

puter and data processing jobs were located in the city (U.S. Bureau of the Census 1980, 1994).

Thus, throughout the 1980s, the Greater Boston economy remained quite centered

3 More than 96 percent of Suffolk County's employment is located in the city of Boston.

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on its principal city; in fact, Boston is one of the few U.S. central cities to house more jobs than people (Boston Redevelopment Authority 1992). In part, the city's continuing economic importance is a product of its postwar politics. In contrast to Massachusetts, Boston's history reveals how a politically shrewd and economically powerful governing coalition can dramatically alter private investment patterns through public policy. Organizing in the late 1950s after decades of economic decline, an alliance of major downtown firms and reform-minded Irish politicians created one of the country's most effective redevelopment agencies, the Boston Redevelopment Authority (BRA). In the 1970s and 1980s, as business political activism waned, the BRA's downtown development strategy institutionalized the agenda of business and Boston's governing coalition became more state centered (Horan 1997). Benefiting from a series of able directors and a well-respected profes- sional staff, the agency used its regulatory and tax powers, its near monopoly on development expertise, and its ownership of valuable downtown property, as well as federal money, to rebuild the city's office economy.

Until 1988, that rebuilding facilitated the expansion of the city's commercial and financial firms and fostered remarkably strong business services growth (Horan 1997). As Boston's office market doubled in size between 1960 and 1990, its business services and financial firms, along with its hospitals and universities, remained strong competitors in national and global markets after high-technology firms faltered. According to the BRA, almost 60,000 private sector jobs were added from 1980 to 1988 (Boston Redevelopment Authority 1992, 1996).

Yet for both economic and political rea- sons, Boston's future looks uncertain, and that uncertainty complicates the issue of regional governance. Although the suburbs housed the high-tech and defense firms whose decline triggered the economic tail- spin, according to the BRA, the city was

badly hurt. It lost almost 80 percent of its 1980s job gains between 1988 and 1992. To date, it has replaced 70 percent of them (Boston Redevelopment Authority 1992, 1994, 1996). On the positive side, recent job growth has taken place in the same sectors-financial services, health, and, more recently, management-that fueled the boom, suggesting the competitive strength of Boston firms and institutions. Indeed, the continued expansion in mutual funds has made Boston the country's second largest financial center and has helped to revive the downtown real estate market (Adams 1997). Further, Boston remains the home of about half the metropolitan region's office space, as well as its most concentrated supply and most prestigious location.

On the negative side, the city's economy has become less diverse, more dependent on the stock market, and even more biased toward skilled employment. Long in decline, Boston's manufacturing sector is almost nonexistent (with roughly 29,000 jobs); employment in personal services, retail and wholesale trade, and transportation has also dropped. Banks and insurance companies have cut employees. The future of health care, an expanding source of jobs for decades, looks problematic in the face of federal reductions in Medicare funding and the financial constraints of managed care (Blanton 1997). Since city residents are more likely to hold low-paying jobs in the services sectors than are suburban commuters, a decrease in less-skilled positions is especially problematic for them (Boston Foundation 1989; Boston Redevelopment Authority 1996). As an employment strategy for its own citizens, Boston's long successful office-oriented development program looks increasingly in need of revision.

At the same time, the city's governing coalition appears too weak to implement new initiatives. Although both the mayor and business organizations endorse new development, there is little evidence that a partnership exists on economic issues. The BRA has yet to play the crucial role it did

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from 1960 through the 1980s: the late 1980s collapse of the city real estate market decimated the agency's property revenues, cutting its budgetary resources and its political influence. As is true for Massachu- setts, the combination of economic boom and bust in Boston has fractured business organizations, a splintering the local media sees as proof that takeovers of local firms have created a group of executives uncom- mitted to the city (Snyder 1988).4 Most dramatically, the city's preeminent business organization for 40 years, the "Vault," recently disbanded, shortly after a Boston Globe editorial called upon it to organize "a stronger, more unified [business] role" ("Value in the Vault" 1996; Vennochi 1997). Since Boston lacks city political parties, politically active unions, or broad- based public interest groups, the city's other principal source of development ideas has been its many community organizations. These gained influence under the Flynn administration in the 1980s, but now, as in the past, they focus on neighborhood issues rather than on broad policy questions. As we shall see, community groups seemed poised to take advantage of the disarray among Massachusetts and Boston economic and political elites.

Managing Uneven

Development If the "fiscal crisis" focused attention on

the state government's policymaking effec- tiveness, uneven development in the 1990s highlights the strategic role of Greater Boston and the importance of building stronger regional governance to integrate

4 This claim is hard to substantiate. Some of the most politically visible executives work for the same firms that organized the governing coalition in the 1950s, even though several of these firms are now owned and run by "out- siders." On the other hand, local executives are not necessarily activists. The head of FMR Corp. (Fidelity Investments), for example, has demonstrated little political interest in "city" issues.

the metropolitan area into the global economy. Regional governance in the form of metropolitan political institutions or some kind of metropolitan political coalition takes on new significance given continuing divisions in state government, the decline of Boston's governing coalition, and the past failure of business to develop globally competitive strategies, as demonstrated in Saxenian's (1994, 1996) work on Route 128 high-technology firms.

Changes in the metropolitan spatial division of labor put "governance" most imme- diately on the political agenda. If Massachusetts' current economic revival continues, it promises to alter existing patterns of regional business activity because, with the exception of financial services and health care, most employment in the region's growing sectors will be located in the suburbs. Because Massachusetts lacks general purpose regional planning or development agencies, as the metropolitan economy expands spatially the number of political decision makers with influence over regional issues will multiply as the need for independent governments to cooperate increases.

Future investment and employment growth will take place in new locations because the high-technology (telecommu- nications, software, and related services) firms seen as crucial to the region's future prefer the suburbs (Adams 1997; Cassidy 1997; Rimer 1997; Stein 1996a, 1996b, 1996c), yet there is little buildable land and almost no large sites along Route 128, the innermost of Boston's two circumferential highways and the historic home of many postwar manufacturing plants, office parks, and corporate headquarters. The highway cuts through several of Massachusetts' wealthiest communities, which continue to resist most nonresidential development whatever the tax gains. Recent demands for space along Route 128 have been met by the renovation of existing commercial space, the conversion of manufacturing buildings, and escalating rents.

New investment and employment is likely to locate along Route 495, another

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circumferential highway located farther away from Boston-roughly 45 kilometers compared to Route 128's 19 kilometer distance. Route 495 offers lower land costs, larger sites, access to more affordable housing, and more development-friendly local governments. The process of decentralization has already begun. From 1989 to 1996, the PMSAs of Lawrence and Lowell, cities along Route 495, added jobs at a greater rate than the Boston PMSA itself (U.S Bureau of Labor Statistics 1989, 1996). In decisions that bode ill for Boston's workers, two of the city's biggest firms, Fidelity Investments and Putnam Investments, have begun moving their less- skilled, labor-intensive operations to the Route 495 corridor.

While accommodating new investment, extensive decentralization will pose governance problems for the regional economy. The greater distance from Boston will raise the costs of moving goods and people- within the suburbs, from the suburbs to Boston's in-town airport, port, and rail- ways, and from the city to the suburbs. While the suburbs within Route 128 are served by a network of recently expanded radial transit and commuter rail lines, such modes are not efficient in less densely set- tled areas. Indeed, Massachusetts officials report that traffic volume on major metropolitan highways has climbed 10 to 30 percent since 1994 (Stein 1997b). Traffic con- siderations remain important to business investment decisions: the most desirable business locations are at the intersection of radial highways with good access to downtown Boston and the airport (interview with S. Horan, vice-president and partner, Meredith and Grew, Inc., 11 April 1997).

Addressing regional transportation issues through new highways or transit will be difficult. While the state government has posted operating budget surpluses, it is close to its annual capital expenditure limit (Massachusetts Taxpayers Federation 1997). An expansion of the metropolitan subway system in the 1980s is still being paid for, even though it benefited from

federal subsidies not likely to be matched in the future.

Political acceptability is as problematic as funding. Recent legislative debates about how to pay for the state government's share of a highway/tunnel project in Boston as federal funding cuts loomed revealed that representatives disagreed over whether taxpayers outside of the region should pay for the metropolitan road system (Grunwald 1996; Wong 1997). Further, opposition to highways and other infrastructural projects is a time-honored tradition in Greater Boston. In the 1970s, after years of organizing against state government agencies, city and suburban community groups allied with local governments persuaded the Republican governor to declare a moratorium on all highway building within Route 128. Despite a dou- bling of passenger traffic at the city's airport in the 1980s, neighborhood activists have successfully blocked airport expansion in the courts while suburban opposition makes a second airport outside of the city highly unlikely. In short, local land use con- trols, mobilized community groups, and environmental laws raise the costs of major construction projects.

A final major issue for governments is the potential fiscal consequence of spatial change. Massachusetts municipalities are constrained by one of the country's most stringent property tax limitations. Since the regional population is not likely to grow, and to the extent that employment decentralization involves a redistribution of, rather than an increase in, jobs, the growth of the outer suburbs will reduce the tax bases of older inner cities and suburbs, many of which house the region's poor. Declining local tax bases pose problems for the Commonwealth's finances. In the recession of the late 1980s, state government financial control boards ran the finances of five cities in the region. Today state government financial assistance accounts for more than 40 percent of the budgets of 12 municipalities, including Massachusetts' second and third largest cities (Mooney 1997).

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The implications of these combined economic and political shifts at state and city levels of government are apparent in recent conflicts surrounding two huge development projects, so-called megaprojects, in Boston-one public, one private; one under construction, the other, aban- doned. At first glance, there is little that is unusual about these conflicts. Common- place in many cities, they epitomize the land use struggles so central to community mobilization in urban regime theory. Yet, placed within the changing spatial dynamics of the emerging metropolitan economy, these conflicts suggest major political and institutional dilemmas facing state and local governments.

The successful project demonstrates the importance of activist state government and federal largesse, neither of which char- acterizes Massachusetts politics at present. Since 1991, Boston has been the site of the largest public works project in the United States, an $8 billion (and climbing) under- ground depression of a major north-south highway directly through the city and the construction of a third tunnel to the nearby airport. When completed, the project will not only signficantly enhance the metropolitan road system but will also remove the existing elevated highway, an enormous blighting structure in the downtown. Getting the project to the building stage was not easy. It took almost a decade of intense negotiations between the Dukakis administration and objecting property owners, community groups, business com- mittees, and environmental organizations as well as the governments of Boston and Cambridge. These negotiations resulted in more than 1,500 mitigation agreements between the state government and oppos- ing parties; these agreements now total one-third of the project's escalating costs. The state government's "policy of conciliation at any cost," as one study put it, was possible because of an almost open-ended federal funding commitment secured by Massachusetts' once powerful Congres- sional delegation (Luberoff and Altshuler 1996). Now, with Congress set to reduce

future federal subsidies, Massachusetts taxpayers will pay a heavy future price for that policy of conciliation (Zitner 1997).

The second, failed project demonstrates that when the state government makes little effort to create political support, it can be outmaneuvered by what appears to be a substantially weaker opponent. In 1996, with the backing of Weld, the powerful Massachusetts Port Authority (Massport), and BankBoston, the New England Patriots' owner proposed building a new football stadium on Massport-owned land at the border of the downtown and the working-class neighborhood of South Boston. After the governor promised the project would proceed despite the bitter opposition of neighborhood residents, neighborhood political leaders, and the mayor, the district's Congressman persuaded the Secretary of the Army to deny the state government a small portion of the proposed stadium site that the Army con- trolled. Without that land, Weld and the team owner were forced to go along with the neighborhood. Thus, although the deal was termed "unprecedented" because the team owner agreed to incur most of the development costs and would have moved the team to the city from the suburbs, politicians remained either unconvinced of the economic benefits, unable to persuade the public, and/or unwilling to face down community protest in order to proceed with a major regional development project (Curran 1997).

Conclusion

Since Boston has the most experienced community groups in the region and con- tains much valuable property, as well as key components of the metropolitan infrastructure, the politics of its megaprojects may well overstate both the power of community groups and the signficance of community protest. But one aspect of Boston's community politics is probably not unusual: the "enclave" agendas of interests at small spatial scales (Plotkin 1990). From the perspective of regional issues and prob-

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lems, specific municipalities often defend localism in the name of community. Further, nonelected, off-budget public authorities like Massport are among the important political actors in the region; they have little experience working with community groups and little institutional incentive to do so. Thus, the brinksman- ship characterizing the megaprojects decisions, though especially dramatic in Boston, may represent the future of regional governance.

Further, while the outcomes of the megaprojects conflicts hint at the possibil- ity of more accountable, locally sensitive development decision making, a future we personally endorse, they also suggest a quite different lesson. Enclave politics, as Plotkin (1990) warned, does not inevitably lead to inclusionary, let alone progressive, policy solutions. Regime theory's emphasis on the difficulties of creating and sustaining coalitions-especially coalitions not privileged by capital or existing political arrangements-seems particularly apt here. Whether, and on what issues, inclusionary rather than enclave metropolitan coalitions could be organized is an important political question.

We can envision at least one other regional governance strategy. Following the agenda of Weld's economic plan, the state government might attempt to establish new public-private institutions to ensure the region's competitiveness. Governance would thus promote the agenda of capital, though not exclusively. For example, as the plan recommended, the state government might attempt to lessen spatial inequalities and utilize existing physical infrastructure through new tax sharing and inner city development policies. While promoting growth, such policies differ considerably from Weld's slogan of "entrepreneurial government." In this scenario, progrowth regional governance also demands activist local politics.

Our analysis of Massachusetts in transition touches upon recent attempts to achieve theoretical commensurability between the regulation approach and

urban regime theory (Lauria 1997; Painter 1997). Until now, while regulationist scholars have emphasized how local governance and politics might contribute to more stable regimes of accumulation (Goodwin and Painter 1996), they have tended to argue that local efforts at governance are likely to be frustrated by the instability of global capitalism and the failure of the national state to contain uneven development (Peck and Tickell 1995; Tickell and Peck 1995). We have proposed here that conditions intrinsic to regions can also explain the instability of governing coalitions and the incoherence of governance structures. Indeed, we believe that the current emphasis on regional governance in both academic and policy communities only makes sense in the context of spatial restructuring, governing coalition fragmentation, and territorial conflict at local levels of the state. Thus, it is structural incoherence within local economies rather than globalization that makes regional governance a timely policy issue.

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