Chapter 3 Discussion
Blakely / Bradshaw 3rd ed.
(ch. 3)
Concepts and Theories of Local Economic Development
Theories:
Local / Regional Development = c x r
where,
c = capacity (economic, social, technological, political)
c is > 1, = 1, <1, as a multiplier to determine relative
leverage of resources
r = resources (natural, location, labor, capital investment, entrepreneurial
climate, transport, communication, industrial, technology, size,
export market, international relationship, national and state govt.
spending)
Neoclassical Economic Theory
Principles:
- Equilibrium of economic systems
- Mobility of capital
“all economic systems will reach a natural equilibrium if
capital can flow without restriction”
- Don’t restrict movement of firms
- Don’t require equity hires, etc
- Don’t save dying or non-competitive firms
- Deregulate
Problems:
Some benefit more from development than others
Gap between the rich and the poor
Often used as the rationale behind programs that “level
the playing field” between distressed areas and well off
areas (circular argument, though)
Economic Base Theories
Economic Growth is directly related to demand for goods, services,
products from outside the region (export)
Product Cycle Theories
- Movement to other regions as stages evolve
spin-off or 2nd tier
growth
higher multipliers
can lead to skewed economy
New Markets Theories
- Inner Cities and rural areas are opportunities
Location Theories
Central Place Theory
Attraction Theories
Reformulation of Local Economic Development
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