The readings for this week:
Jan 13: History, Concepts and Politics I
•Richardson, Harry. 1979. “Introduction,” Regional Economics. pp.17-37. [c-tools]
•Krugman, Paul. "Localization," in Geography and Trade. Cambridge, Mass. MIT Press,
1991, pp. 35-67. [Library reserves]
•Glaeser, Edward L. "Why Economists Still Like Cities." City Journal, Vol. 6, No. 2, 1996,
pp. 70-77. [Library reserves]
•Flammang, R. A. 1979. “Economic growth and economic development: Counterparts or
competitors?” Economic Development and Cultural Change 28, 47-62 [c-tools] -- NOTE:
in c-tools "Resource" section
Jan 15: History, Concepts and Politics II
•Wolman, Harold, and David Spitzley. "The Politics of Local Economic Development."
Economic Development Quarterly, Vol. 10, No. 2, May 1996, pp. 115-150. [Library
reserves]
•Fitzgerald, Joan and Nancey Green Leigh. 2002. “Introduction” and “Redefining the
Field of Local Economic Development.” In Economic Revitalization: Cases and
Strategies for City and Suburb. London: Sage Publications. [c-tools]
•Mier, Robert. Metaphors of Economic Development, in Bingham, Richard D., and
Robert Mier, eds. 1993. Theories of Local Economic Development. Newbury Park: Sage.
(Chapter 14, pp. 284-304). [c-tools]
Flammang, R. A. 1979.
“Economic growth and
economic development:
Counterparts or competitors?”
Economic Development and
Cultural Change 28, 47-62
Economic Growth?
or
Economic Development?
9 ways to approach growth vs. development…
1.
2.
3.
4.
5.
6.
7.
8.
9.
ignore
Conflate the two
Growth applies to rich countries, development to poor
Growth – come from endogenous forces, development
from exogenous
Difference in the expansion of productive potentials
Alternating processes: a period of growth leads to a
period of development, etc.
degree of structural change involved:
dev. Involves structural change (qualitative change)
growth does not (quantitative)
Difference in distribution of income – dev affects
distribution but growth does not.
Range of economic choice – some say dev. Has more
choices, others say growth.
9 ways to approach growth vs. development…
1.
2.
3.
4.
5.
6.
7.
8.
9.
ignore
Conflate the two
Growth applies to rich countries, development to poor
Growth – come from endogenous forces, development
from exogenous
Difference in the expansion of productive potentials
Alternating processes: a period of growth leads to a
period of development, etc.
degree of structural change involved:
dev. Involves structural change (qualitative change)
growth does not (quantitative)
Difference in distribution of income – dev affects
distribution but growth does not.
Range of economic choice – some say dev. Has more
choices, others say growth.
Growth – more of the same
Development – producing
different goods and services
(product) in different ways
(process)
Relates to Technology: two stages of introduction
1. Does existing work, but faster (efficiency gains)
2. Does new work not possible or imaginable with the old
technology (innovation)
Source: D hayden
Source: flickr.com/photos/ beltzner/2902587241/
W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto
(Cambridge: Cambridge University Press, 1960)
“It is possible to identify all societies, in their economic dimensions, as lying
within one of five categories:
the traditional society,
the preconditions for take-off,
the take-off,
the drive to maturity, and
the age of high mass-consumption.”
p. 4
Source: International Development Research Centre (IDRC), http://www.idrc.ca/openebooks/296-9/
The interaction of growth and development
“With no structural change, the economy would
eventually smack into diminishing returns in a set
of given sectors, and growth would have to slow
down. But the reverse also applies: it is growth in
the older sectors that accelerates the supplies of
savings for investment in the newer ones” [51]
Finally, development linked to sustainability and to
equity
Development is “primarily an attempt to increase
the amount of the means of subsistence which the
environment can provide” [52, quoting Wilkinson]
and development is distributive, has winners and
losers…
Krugman, Paul. "Localization,"
in Geography and Trade.
Cambridge, Mass. MIT Press,
1991, pp. 35-67
Why do industries cluster locally?
Ask Alfred Marshall…
Three reasons:
1 Pooled labor market
2 Provision of non-traded inputs (specific to an industry) in
greater variety and at lower cost. [e.g., shared machinery]
3 Technological spillovers: information flows more easily
locally.
So: industry localization   external economies
and What kinds of industries tend to be highly
localized?
REFLECTION: 3 questions in location theory
1. Why does economic activity cluster? (e.g., why are
there cities, industrial districts, etc.?)
1. Why does it initially cluster in a specific location? (e.g.,
steel in Pittsburgh, computers in the SF Bay Area, autos
in Detroit, music in Nashville, etc.)
1. Why does the initial cluster remain or instead disperse
and/or relocate? (e.g., the aerospace industry moved
from the east coast and Midwest to Los Angeles, San
Diego, Seattle, etc.)
Glaeser, Edward L. "Why
Economists Still Like Cities."
City Journal, Vol. 6, No. 2,
1996, pp. 70-77
City advantages:
higher wages, higher productivity
“high-skill cities prosper, low-skill ones stagnate or
decline” [72]
“The shift away from heavy industry has been the
salvation of urban America.” (71)
like Krugman, quotes Alfred Marshall (1842-1924):
“Great are the advantages which people following
the same skilled trade get from near neighborhood
to one another. The mysteries of the trade
become no mystery but are, as it were, in the air.”
Benefits of large scale and specialization of the
urban labor market
greater return on human capital in cities (hence
greater incentive to invest in human capital – e.g.,
go to grad school!)
diverse industrial mix in cities also a plus
and no inherent limits to growth of cities
(i.e., Mumford was wrong)
CITIES: centers of innovation
Jane Jacobs
Implications for ED policy
Wolman, Harold, and David
Spitzley. "The Politics of Local
Economic Development."
Economic Development
Quarterly, Vol. 10, No. 2, May
1996, pp. 115-150.
How to Measure ED?
Source: http://www.bea.gov/regional/gdpmetro/
growth vs. development
(though we speak of development, we often really
just mean growth)
www.belfastcity.gov.uk/
Fitzgerald, Joan and Nancey
Green Leigh. 2002.
“Introduction” and “Redefining
the Field of Local Economic
Development.” In Economic
Revitalization: Cases and
Strategies for City and Suburb.
London: Sage Publications.
Another historical view….
Fitzgerald, Joan and Nancey Green Leigh. 2002. Economic Revitalization: Cases
and Strategies for City and Suburb. Sage. pp. 10-26
PHASE
Selective characteristics
1. State Industrial Recruitment (starting in the
1930s)
Create good business climate (taxes, loans,
infrastructure, etc.) • “greasing the skids” for
business • corporatist paradigm
2. Political Critiques of Local Economic
Development Activity (starting in the late 1960s)
Focus on who is paying and who benefits. ED
actors as political agents • political economic
analysis • critique of “smokestack chasing” •
recognition of tension between footloose capital
and communities •
3. Entrepreneurialism and Equity Strategies
Two separate movements: Promoting high tech
(mimic Silicon Valley) and pushing
equity/redistribution (e.g., Mayor Harold
Washington’s initiatives in Chicago, 1980s).
4. Sustainability with Justice
Balancing economic development, social justice
and environmentalism. Brownfield development.
5. Privatization and Interdependence
Market solutions (e.g., Michael Porter’s
competitive inner cities) and regional/metropolitan
strategies.
Mier, Robert. Metaphors of
Economic Development, in
Bingham, Richard D., and Robert
Mier, eds. 1993. Theories of Local
Economic Development. Newbury
Park: Sage. (Chapter 14, pp. 284OED: 1. A figure of speech in which a name or descriptive word or phrase is
304)
transferred to an object or action different from, but analogous to, that to
which it is literally applicable; an instance of this, a metaphorical expression.
2. Something regarded as representative or suggestive of something else, esp.
as a material emblem of an abstract quality, condition, notion, etc.; a symbol,
a token. Freq. with for, of.
Richardson, Harry. 1979.
“Introduction,”
Regional Economics. pp.17-37
Three Classic Types of
Regions:
Nodal
Homogeneous
Political/Planning
French
Italian
German
One regional divide: INTER-REGIONAL
Industrial north vs. rural south
Two geographic scales of comparison:
1. Interregional (across regions)
2. Intraregional (within regions)
A second regional divide: INTRA-REGIONAL
wealthy suburbs vs. poor innercity
Don’t confuse two kinds of depressed
regions:
underdeveloped
High income
declining (post-peak)
Low income