REGIONAL

DEVELOPMENT user

THEORY
PLANNING FOR ARCHITECTS: A CAPABILITY BUILDING SEMINAR FOR
ARCHITECTS
UNITED ARCHITECTS OF THE PHILIPPINES
Professional Development Commission
2nd Floor, UAP Headquarters
53 Scout Rallos St. Quezon City, Metro Manila
EnP Mike V. Guioguio
Resource Speaker

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 DEFINITION

"Economic Growth": The expansion of a regional economy in
terms of GDP, earnings, employment or employment
opportunities

"Development": Based on some implicit or agreed-on goals and
desirable outcomes, development implies an improvement in the
human condition.

"Economic Development": implies both, an improvement in
the economic condition of people as well as its accomplishment
through economic means.

"Regional Economic Development": Due to the persisting
geographical unevenness of economic development, economic
geographers are interested in the spatial and regionalized
manifestations of, and the processes associated with, the stimuli
and barriers to economic `development.

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 Regional Economics

a framework within which the
spatial character of economic
systems may be understood. We
seek to identify the factors
governing the distribution of
economic activity over space and
to recognize that as this
distribution changes, there will be
important consequences for
individuals and for communities.

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 REGIONAL OR "SPATIAL"
ECONOMICS

regional or "spatial" economics might be summed up in the
question "What is where, and why—and so what?" The first what
refers to every type of economic activity: not only production
establishments in the narrow sense of factories, farms, and mines,
but also other kinds of businesses, households, and private and
public institutions. Where refers to location in relation to other
economic activity; it involves questions of proximity, concentration,
dispersion, and similarity or disparity of spatial patterns, and it can
be discussed either in broad terms, such as among regions, or
microgeographically, in terms of zones, neighborhoods, and sites.
The why and the so what refer to interpretations within the
somewhat elastic limits of the economist's competence and
daring.

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 Spatial and Regional
Economic Problems

(1) natural-resource advantages, (2)
economies of concentration, and (3) costs of
transport and communication. In more
technical language, these foundation stones
can be identified as (1) imperfect factor
mobility, (2) imperfect divisibility, and (3)
imperfect mobility of goods and services.

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 VERTICAL LINKAGES
AND HORIZONTAL
LINKAGES

. In general, vertical linkages are
involved in self-reinforcing growth or
decline tendencies, whereas horizontal
linkages have a stabilizing influence.
Various theories about the generation of
regional growth have emphasized either
demand for the region’s outputs and
backward linkage, or supply of inputs
and forward linkage.

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 ECONOMIC BASE
APPROACH

identifies exports as the generator
of growth in a region; nonbasic, or
local market-serving, activities are
assumed to grow only in response
to the local demand generated by
the export sector and to maintain a
more or less fixed ratio to the latter.

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 FINAL DEMAND

With input-output analysis, it is possible
to trace the impact of an increase in
business receipts from exports or other
components of "final demand" on
payments and incomes in the region
through local spending for payrolls and
purchases from other businesses in the
region. The total increase in regional
income generated per dollar of initial
increase in final demand receipts is the
regional income multiplier.
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 INTERREGIONAL
TRADE AND FACTOR
MOVEMENTS

The migration of capital is subject to determinants
closely analogous to those affecting labor migration,
though the patterns of interest and wage differentials
are quite dissimilar, as are the patterns of capital and
labor flow.

Interregional trade can serve as a partial substitute for
labor and capital flows in equalizing returns to those
factors. Flows of labor and capital can either substitute
for or complement one another; the substitutive relation
exerts an influence toward stability in relative regional
growth, while the complementary relationship can be
the basis of self-reinforcing and cumulative tendencies.
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 CONVERGENCE

The observed convergence in regional income
levels and structures in recent decades is not a
universal trend. Interregional trade as well as
labor and capital movements, though commonly
promoting convergence, can in some situations
have the opposite effect; and technological
dynamics can just as well promote divergence as
convergence. According to one plausible
hypothesis of development stages, divergence is
likely to characterize the youthful stages of a
country’s industrial development, and
convergence the more mature stages.

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 CITIES

Large cities have played a crucial role in regional
and national economic development, in their
capacity as transmitters of ideas and practices
from the outside world and also as places where
people from diverse parts of the home region or
country are brought into close contact and
exposed to new institutions and challenges and a
wider variety of opportunities. Innovation has
flourished in such a germinating ground. New
industries and other activities that started in large
cities have historically tended to decentralize at a
later stage to play a role in the development of
other regions or parts of the region.

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In the absence of a unified body of
regional development theory, a
large number of overlapping,
explanatory propositions have
been advanced by the literature of
the past decades which, it is
suggested, can be summarized in
these categories:

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DISTRIBUTION OF NATURAL RESOURCES; LAND
USE; Efficiency & Equity of their ownership &
utilization Stutz, p.532

(Lack of) LOCAL LEADERSHIP /
ENTREPRENEURSHIP; How high is the local
"entrepreneurial birth rate"? Stutz, p.34

GEOGRAPHIC INCIDENCE OF INFORMATION,
KNOWLEDGE. TECHNOLOGY, HUMAN CAPITAL;
LABOR PRODUCTIVITY [Quality of Education &
(Re-)Training]. Conditions for continuing learning
given the "PATH DEPENDENCY" of new knowledge
and learning. Stutz, p. 531; 533; 539;
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PERCEPTIONS, ATTITUDES, VALUES, WORK ETHICS;
Other cultural factors influencing economic development
Stutz, p.528; 534;

SOCIAL (including LEGAL), ECONOMIC (including
FINANCIAL & COMMUNICATIONS), and POLITICAL
INSTITUTIONS, SOCIAL OVERHEAD CAPITAL (SOC) &
INFRASTRUCTURE, Stutz, p.337; 436 (Porter's
Competitive Advantage);

LOCAL CAPITAL FORMATION & INVESTMENT;
DISTRIBUTION (and REDISTRIBUTION SYSTEMS) OF
(FACTOR) INCOMES, POVERTY, WEALTH & POWER
(Ability to impose allocative preferences unto others]
Stutz, p.532

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EFFICIENCY OF SERVICE PROVISIONS IN SPATIAL SYSTEMS;
URBAN HIERARCHIES; and SYSTEMS of CITIES; Presence of
URBANIZATION ECONOMIES; Role of Communication and
Transportation Technologies in Improving Information Access and
Personal Mobility in Cities, Stutz, pp.335ff. (& Ch.6);

INTRA-ORGANIZATIONAL and INTER-ORGANIZATIONAL
ALLOCATION MECHANISMS; Access to internally generated capital
and knowhow; Access to organizational networks. Ability of Host
economy to benefit (and be negatively affected) from direct
investment of foreign corporations and their oligopolistic structures &
behaviors. See Handout [Keiretsu (Japan); Chaebol (Korea)] ,Stutz,
pp.368ff. ;

REGIONS ARE (to whatever degree) OPEN SUBSYSTEMS: open to
positive & negative external influences in an increasingly
transactions- dependent world. Extent to which Liberalization of
Trade (GATT/WTO) will eliminate Needed Protection of Third World
Industries in Early Stages of Development.[possibilities and
advantages of 'selective closure'] Stutz, pp.455ff.

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EXPORT DEMAND FOR A REGION'S GOODS &
SERVICES; Export promotion policies; [also: pitfalls of
trade] Stutz, pp.429ff.; 436ff;

MULTIPLIERS: INDIRECT (INTER-INDUSTRY) LINKAGE
& (HOUSEHOLD/INCOME) INDUCED EFFECTS, Quality
of the local ("non-basic") sector; INVESTMENT
INCENTIVES, [also: (Primary & secondary) IMPORT
SUBSTITUTION; Export Substitution (= shifting from raw
material exports to processed industrial exports)]

ACCESSIBILITY OF PLACES & CONNECTIVITY OF
TRANSPORTATION & COMMUNICATIONS SYSTEMS
(Networks), STRUCTURE OF TRANSACTION COSTS;
Distributions systems and marketing channels; Kanban
(just-in-time); Stutz, p.180-1;
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MOBILITY and MIGRATION: EQUILIBRIATING OR
DISEQUILIBRIATING PROCESS? Local creation (education) vs.
import or export of embodied knowledge; "brain drain"; Microsoft
Phenomenon (Brain gain). The "Washington State Model" of
Development by Neglecting Higher Education. [Selected Migration
Impacts] Stutz, p.73; 532

CAPITAL MOBILITY & FLOWS; ACCESS TO VENTURE CAPITAL;
FDI; Truncation & other issues: "Beauty and the Beast" (P.Dicken):
Host-Region Propositions) Stutz, pp.438ff.

STRUCTURAL CHANGE: 3+2-Sector Hypothesis (TSH); Changes in
the COMPOSITION of the LABOR FORCE associated with Engel's
Law and Differential Productivity Advances among economic activities;
ROUNDABOUT Production also in the Services? More sophisticated
Interdependence Patterns reflected in Changing Input-Output
Structures. Role of "Informal Sector" activities; The Rise of the "Third
Sector" (Jeremy Rifkin); Product Cycles; Changes in the Organization
of Labor. Stutz, p.537/8;

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DEMOGRAPHIC CHANGE & IMBALANCES [NEO-
MALTHUSIANS] High population growth rates and resource
limitations Stutz, p.529-30; p.542; also Ch.3

LOCALIZATION AND POLARIZATION OF ECONOMIC
CHANGE: Development is uneven! "Initial advantage";
cumulative processes; growth poles, industrial clusters and
growth centers; key industries; Stutz, p.549

ROLE OF TECHNOLOGICAL CHANGE & INNOVATION
(N.Kondratiev, Joseph Schumpeter; Francois Perroux,
Mensch) in increasing labor productivities and the quality of
life & work; "Appropriate" or "Intermediate" technology (E.
Fritz Schumacher ["Small is Beautiful"])
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LONG-TERM AND SHORT-TERM PATTERNS OF CHANGE: Economic
instabilities (business cycles) and flexibilities (Post-Fordism) Stutz,
pp.383ff. (long waves)

OPTIMISTIC CONCLUSIONS: MODERNIZATION; "Trickle-Down"
(Hirschman) & "Take-Off" (Rostow) Processes; [Often associated with
conservative perspectives] INTEGRATION & CONVERGENCE;
PARTICIPATION; Social Mobility; Equalization; Civil Society & the Third
(Volunteer) Sector; Beneficial Work of NGOs and Foundations.
"Capitalism with a Human Face". Collaboration on the "Spaceship
Earth"; Signs of environmental and social responsibilities of Western
governments and corporations. Stutz, p.549

PESSIMISTIC PROPOSITIONS: BACKWASH (Myrdal) and
POLARIZATION Effects dominate over Spread Effects (Gunnar Myrdal).
CONTINUING & INCREASING INEQUALITY &
UNDERDEVELOPMENT & DEPENDENCE; Worsening of TERMS OF
TRADE; MARGINALIZATION resulting from selected facets of
GLOBALIZATION and the abundance of competing low-cost production
locations; Capitalist, "exploitative" practices of multinational corporations;
Digital & other "DIVIDES"; [Often associated with "Liberal" or more
Radical Perspectives] Stutz, p.549
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 THE END

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