The Problem Is Deeper Than You Think

It isn't the dollar amount. It's the formula.

Population in the U.S. is heavily skewed to metros

Federal funding decisions that use data in fat-tailed distributions* to allocate and award resources unintentionally cause unpredictable systematic failures.

Research presented to Anthropic's Economic Futures Symposium

*A fat-tailed distribution means rare events carry outsized consequences. When extremes do happen, their impact is far bigger than what a normal “bell curve” would predict.

Funding Challenge & Significance

Federal funding decisions assume a normal population distribution. Small places live in a fat-tailed one*.

Over $5,000,000,000,000
of the $6.3T U.S. federal funding allocation and awards are made using extreme uneven distribution as primary decision criteria causing systematic failures

The Paradox of Being Both "Rural" and "Not Rural"

The causes of primary criteria for funding based off fat-tailed distributions: unintended, unpredictable, catasrophic consequences occur.

Cape Girardeau, MO

Classified as RURAL

USDA Business & Industry Loan
≤ 50,000 population, outside urbanized area
DOT Rural Surface Transportation
Outside UZAs with population ≥ 200,000
EDA Build to Scale
Outside Urbanized Areas (≥ 50,000 population)

Classified as URBAN

Problem
USDA Community Facilities Loan
≤ 20,000 residents
EDA Public Works
< 15,000 population
HUD Rural Housing
< 2,500 population
EPA Small Water Systems
< 10,000 population
HRSA
• Non-metropolitan counties
• Outlying metro counties, no urban area > 50,000
• Census tracts with RUCA codes 4-10 in metro counties
• Census tracts ≥ 400 sq miles, density ≤ 35 people/sq mile with RUCA codes 2-3 in metro counties
• Census tracts with RRS 5 and RUCA codes 2-3 ≥ 20 sq miles in metro counties
3
Programs Eligible
5
Programs Excluded
8
NOFOs Searched Through
13
Hours to Research

There's Plenty of Research but Few Solutions.

Most studies look from the outside in, but success is built from the inside out.

Research Gap

Systematic Framework

Current research on rural entrepreneurial ecosystems emphasizes the importance of local assets and social capital but lacks systematic frameworks for matching communities to appropriate development strategies.

Research Gap

Comprehensive Solutions

Federal resource allocation studies consistently identify bureaucratic fragmentation and population-based criteria as barriers to effective rural development, yet few propose comprehensive solutions.

Research Gap

Scalable Integration

Place-based development literature demonstrates the effectiveness of asset-driven approaches but has not been integrated with federal program structures or scaled beyond individual case studies.