It is argued that both economic concerns and political factors can be synthesized within a new framework to improve city policymaking. This approach is based on a systematic empirical study of policymaking in Milwaukee (Wisconsin) and Baltimore (Maryland) in the 1970s and early 1980s. Numerous government documents and extensive interviews with nearly 100 city, state, and federal officials are used to explore how these two cities implemented federal redistributive and developmental programs in education and housing during a time of declining economic growth, dramatic population changes that affected the tax bases and the demand for services, and severe losses in manufacturing jobs and business investment. Part 1 examines the economic characteristics of the cities and how remunerative considerations have guided the management of Federal programs in education and housing. Part 2 explores the policy relevance of local politics and Black representation and redistributive policy. Finally, Part 3 offers a more differentiated view of urban policy making, with a "political choice" model that shows that urban policy can be the result of political choice as well as economic constraint. Thirty-two tables present study findings. (Contains 158 references.) (SLD)