Mountains of Disappointment: The Failure of State-Led Development Aid in Appalachia

Abstract

In 1964, President Lyndon B. Johnson declared “war” on poverty. One component of the ensuing cadre of government agencies and initiatives was the Appalachian Regional Commission (ARC), charged with overseeing the development of the impoverished region stretching from southern New York to northern Alabama. Despite the fact that the ARC is now one of the longest-running regional development agencies, it has largely failed in its goals to develop the region and much of Appalachia remains mired in poverty. This work examines the reasons for the failure of the Appalachian Regional Commission and domestic, state-led development aid. I find that the ARC has failed to achieve its goals for the region due to its inability to perform rational economic calculation and as a result of issues of political economy.

Keywords: Appalachia, Appalachian Regional Commission, Development Aid, Economic Calculation, Political Economy

JEL Classification: H11, H59, H79, I30, R58