The readings for this week: Jan 13: History, Concepts and Politics I

1. 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]

2. Flammang, R. A. 1979. “Economic growth and economic development: Counterparts or competitors?” Economic Development and Cultural Change 28, 47-62

3. Economic Growth?or Economic Development?

4. 9 ways to approach growth vs. development… • 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.

5. 9 ways to approach growth vs. development… • 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.

6. Growth – more of the sameDevelopment – producing different goods and services (product) in different ways (process)

7. 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)

8. Source: D hayden

9. Source: flickr.com/photos/ beltzner/2902587241/

10. 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/

11. 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]

12. Finally, development linked to sustainability and to equityDevelopment 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…

13. Krugman, Paul. "Localization," in Geography and Trade. Cambridge, Mass. MIT Press, 1991, pp. 35-67

14. Why do industries cluster locally? Ask Alfred Marshall…Three reasons:1 Pooled labor market2 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 economiesand What kinds of industries tend to be highly localized?

15. REFLECTION: 3 questions in location theory • Why does economic activity cluster? (e.g., why are there cities, industrial districts, etc.?) • 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.) • 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.)

16. Glaeser, Edward L. "Why Economists Still Like Cities."City Journal, Vol. 6, No. 2,1996, pp. 70-77

18. 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.”

19. Benefits of large scale and specialization of the urban labor marketgreater 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 plusand no inherent limits to growth of cities (i.e., Mumford was wrong)

20. CITIES: centers of innovation Jane Jacobs

21. Implications for ED policy

22. Wolman, Harold, and David Spitzley. "The Politics of Local Economic Development." Economic Development Quarterly, Vol. 10, No. 2, May 1996, pp. 115-150.

23. How to Measure ED? Source: http://www.bea.gov/regional/gdpmetro/

24. growth vs. development(though we speak of development, we often really just mean growth)

25. www.belfastcity.gov.uk/

26. 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.

27. Another historical view…. Fitzgerald, Joan and Nancey Green Leigh. 2002. Economic Revitalization: Cases and Strategies for City and Suburb. Sage. pp. 10-26

28. 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) OED: 1. A figure of speech in which a name or descriptive word or phrase is 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.

30. Richardson, Harry. 1979. “Introduction,”Regional Economics. pp.17-37

31. Nodal Homogeneous Political/Planning French Three Classic Types of Regions: Italian German

32. Two geographic scales of comparison:1. Interregional (across regions)2. Intraregional (within regions) One regional divide: INTER-REGIONAL Industrial north vs. rural south A second regional divide: INTRA-REGIONAL wealthy suburbs vs. poor innercity

33. Don’t confuse two kinds of depressed regions:underdevelopeddeclining (post-peak) High income • Low income