The Role of Regional Development Organizations (RDOs) in Economic Development

The Role of Regional Development Organizations (RDOs) in Economic Development

April 17, 2020
The Role of Regional Development Organizations (RDOs) in
Economic Development
Regional Development Organizations (RDOs) are multi-
 providing technical assistance and planning services to
jurisdictional, quasi-governmental organizations that
member governments; and
provide planning and development services to their member
local governments. RDOs help communities access federal
 developing and implementing strategic investment plans
and state funds in order to plan and implement major
on a local and regional basis.
infrastructure improvements and economic resiliency and
community development initiatives. Many RDOs operate
Some RDOs help local governments apply for funding and
with a community-informed planning process that is
administer grants. Other RDOs form regional initiatives
regional in scope, builds buy-in among stakeholder groups,
across jurisdictions and the private sector. For instance,
and solicits input from the local and regional perspectives,
from 2005 to 2007 an RDO and multiple jurisdictions in
including local elected officials and the private sector.
Mississippi’s Pontotoc Union Lee (PUL) Alliance
RDOs can also connect congressional offices to local
developed infrastructure and coordinated activities to
stakeholders and elected officials. RDOs vary in terms of
successfully recruit a major auto manufacturer.
roles, authorities, structures, capacity, and the range and
type of services provided. This In Focus will highlight the
Some RDOs perform duties relating to administrative,
roles and forms of RDOs, the federal funding available to
development finance, or regional planning needs in addition
support RDOs, and considerations for policymakers.
to their economic development roles. For instance, some
RDOs manage state and federal programs and administer
What Is an RDO?
loan funds, workforce development, environmental,
“Regional Development Organization” refers to a broad
emergency planning, aging, or other health and human
category of organizations that includes economic
services programs. Some RDOs serve as the regional or
development districts (EDDs), local or area development
local transportation policy and planning boards as
districts, councils of governments (COGs), regional
Metropolitan Planning Organizations (MPOs), Rural
planning commissions, and similar organizations. Many
Planning Organizations (RPOs), or Regional Transportation
RDOs are governed by a body comprised of leaders from
Planning Organizations (RTPOs) that lead long-term
member governments. The National Association of
planning and guide transportation and transit funding
Development Organizations (NADO) and the National
decisions.
Association of Regional Councils (NARC) are national
membership organizations that represent the interests of
Forms of RDOs
RDOs and provide advocacy and technical assistance
Economic Development Districts (EDDs) and Local
services to RDOs. According to NADO, there are over 520
Development Districts (LDDs) are two forms of RDOs that
RDOs in the United States. According to NARC,
are connected to specific federal economic development
approximately 90% of “general purpose governments in the
programs. Despite varying designations, the types of
United States (counties, cities, townships, towns, villages,
organizations share similar functions.
boroughs) are served by COGs and regional councils.”
American regionalism scholars note that most RDOs were
Some RDOs apply for designation by the Department of
formed before 1974 and most states have at least one RDO.
Commerce’s Economic Development Administration
Metropolitan statistical area (MSA) designations—used by
(EDA) as an Economic Development District (EDD).
some federal programs to allocate resources—do not
According to the EDA, EDDs are “multi-jurisdictional
necessarily align with RDO boundaries, but RDOs may
entities that help lead the locally-based, regionally-driven
support jurisdictions within or across MSAs.
economic development planning processes with public and
private sectors to establish a roadmap for collaboration”—
The Roles of RDOs
notably the Comprehensive Economic Development
The roles and services provided by RDOs vary and may
Strategy (CEDS). EDA’s Partnership Planning program
depend on their state and federal mandates, as well as the
funding helps EDDs develop and implement the regional
RDO’s capacity. According to the national groups, common
CEDS and related economic development activities.
key roles for RDOs include:
According to the EDA, 391 RDOs were designated as
EDDs in FY2018.
 fostering regional cooperation, economic
competitiveness, and intergovernmental collaboration;
Three federal-state-regional commissions partner with
RDOs, which they term Local Development Districts
 building local capacity;
(LDDs). In the regions of the Appalachian Regional
Commission (ARC), Delta Regional Authority (DRA), and
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The Role of Regional Development Organizations (RDOs) in Economic Development
Northern Border Regional Commission (NBRC), LDDs
(CDBG) program. RDOs may also receive funds to
develop projects, administer grants, conduct outreach, and
administer CDBG awards for local governments.
provide other support. LDDs may receive the EDA’s EDD
designation for the LDD’s service area (see Figure 1).
 Grant programs through the Department of Agriculture,
Rural Development may provide funding or technical
Figure 1. RDOs Include LDDs and EDDs
assistance to RDOs to support their involvement in
planning, broadband, and infrastructure projects.
Programs include the Rural Community Development
Initiative, the Rural Economic Development Innovation
Initiative, the Economic Impact Initiative Grant, and
others.
 Regional initiatives, including workforce development
and human service programs, provide administrative
funding for implementing or coordinating federal
programs. For instance, RDOs may receive funding
from the Department of Labor for workforce
development and other activities.
RDOs may also receive funding from state governments,

membership dues, fees for administering awards for local
Source: CRS.
governments, fee-for-service consulting or technical
assistance, and other sources. One-time state and federal
State RDO Designations and Roles
grant awards may fund planning, technical assistance, or
States may designate planning, workforce, transportation,
implementation projects.
or economic regions and subregions, which may be led by
RDOs and may be the same as EDD regions. A recent study
Considerations for Policymakers
notes that 44 states have legislation that enables or
Since the 1960s federal funding for regional planning,
prescribes the establishment of RDOs, such as regional
regionalism, and RDOs has been episodic. Congress may
planning commissions. States may also provide partial
seek to consider continued or expanded roles for RDOs as
funding for RDOs. States may engage RDOs in the review
they develop regional policies for transportation, housing,
of local plans and funding decisions for some programs. In
workforce, environmental, entrepreneurship, and similar
some states, nongovernmental statewide organizations
issues. These interests may warrant the following
provide training, advocacy, and other services to member
considerations of the advantages and limitations of RDOs.
RDOs. For instance, the Tennessee Development District
Association is a state network comprised of individual
Policymakers interested in federal economic development,
RDOs across the state.
and place-based strategies in particular, may consider an
expanded role for regional program strategies and RDOs.
Federal Resources for RDOs
As conveners, RDOs can bring leaders together from the
The federal government supports RDOs in a variety of
private sector and from across geographies and political
ways, depending on their mission and program goals. The
affiliations to develop regional approaches to complex
two main sources of federal funding for RDOs include
issues. Some economic development professionals note that
EDA’s Partnership Planning grants and funding from three
RDOs with some degree of state support—either financial
of the federal-state-regional commissions (ARC, DRA, and
or political—may have expanded impact and influence on
NBRC). These sources provide partial funding for RDO
planning and implementation efforts.
operations in their regions. Other federal funding options
for RDOs are listed below.
However, RDOs may be restricted by the type of legal
authorities provided to them to tax, regulate, and implement
 The Federal Highway Administration and the Federal
policy. Researchers note that RDOs have the ability to
Transit Administration in the Department of
establish processes, develop visions, and coordinate plans,
Transportation provide some planning funds to states for
but many are limited in their legal authority to implement
Metropolitan Planning Organizations (MPOs), Rural
them as a regional entity on issues that are typically
Planning Organizations (RPOs), or Regional
controlled by local jurisdictions. Additionally, RDOs vary
Transportation Planning Organizations (RTPOs), which
in size, structure, scope, roles, and the extent of services
are matched by state or local funds. According to the
offered. As such, the capacity of individual RDOs to plan
National Association of Regional Councils, “Nearly half
and implement coordinated, regional strategies varies
of MPOs operate as part of a Regional Council or
greatly. Limited funding for the provision of these services
Council of Governments serving the same general
may constrain RDOs ability to develop and lead initiatives
geography.”
on an ongoing basis.
 RDOs may receive funding for planning or other
Julie M. Lawhorn, Analyst in Economic Development
activities through the Department of Housing and Urban
Policy
Development, Community Development Block Grant
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The Role of Regional Development Organizations (RDOs) in Economic Development

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