Contemporary regional development approaches

Some thoughts from a recent lecture. Refs are a bit old.

Is a new approach to explain regional development needed? If so, what are the problems with the Top-Down/Centre Down (Classical) development theory? There is a school of thought which holds that old theories of regional development need to be replaced with a new approach or model, that being the "bottom-up" approach. This stems from the widely held belief by detractors of the classical regional development theories that these simply did not work sufficiently well.

Stohr cites the example of Italy during the 1960s in which the central government committed huge financial resources to a regional policy of creating growth centres in line with the prevailing "top-down" development theories of the time. His view of the utility of classical development theory can be summarized in the following quote: The past three decades, dominated by development strategies "from above", have not led to decreased disparities in living levels. Disparities have in general increased. This applies both to disparities between social strata and between geographical areas. (Stohr, Development From Above or Below)

Stohr and other authors suggest that an alternate approach is needed to describe development patterns and provide a basis for government policy.

Centre Down Paradigm:

The general thrust of the Centre or Top Down theory of regional development a relatively few, large investments can be made in specific sectors of the economy or geographical areas and the benefits will spread and help other areas. It is often described as the "trickling down" approach. Decisions are made by government without consultation with local people. Examples of include resource development and process projects such as those involving petroleum, minerals and forestry resources, infrastructure projects such as roads, airports, mass transit, hard services and rail, office and retail development to regenerate urban areas and investments in science and high technology. In a sense, if something is constructed or invested in, benefits will come.

The following briefly summarizes the characteristics of the traditional or classical theories of regional development. New approaches take a different perspective and can be contrasted against this:

• traditional theories stress the core/periphery polarization in which capital flows from the core to the periphery and resources flow back to the core (eg. investments in oil fields flow from the city to a region, oil flows to city to power production);
• assume that development (spontaneous or induced) starts in a few dynamic sectors and geographical areas and spreads to other sectors and areas;
• the emphasis in on urban and industrial, capital-intensive development, the highest available technology and maximum use of external and scale economies;
• development usually involves large scale investment projects, efforts at increasing functional and territorial integration, increasing scale of the private and public organizations required to transmit development through these integrated units, large redistribution mechanisms and the reduction of economic, social, cultural and institutional barriers which hinder transmission effects with and between these units (Stohr)

A significant problem with this style of regional development programs is the risk of back wash effects. Back wash occurs when capital and resources invested flow from the periphery back to the core, something that is contrary to the intent of a regional development program (Stohr). It is this sort of problem why some suggest the need for an alternative approach.

Bottom-Up Approach:

This approach holds that decisions and power should be as close to the bottom as possible with coming from a region rather than being imposed from outside. Self-directed and self-generated economic growth and development will occur with greater success than a potentially risky project imposed from above.

One promoter of a new approach is Illeris who suggests that regional development patterns in western Europe in recent decades exhibit a mosaic like pattern of dynamic and declining regions with no uniform core/periphery polarization. This has, Illeris claims, replaced the former uniform concentration of economic growth in the national core areas. The lack of a regional development pattern exhibiting the core-periphery pattern is used to cast doubts on the success of the traditional models and a reason put forward to support the need for a bottom-up approach.

Illeris has formulated what he calls an inductive theory for regional development in economically societies. The following summarizes his theory:

• the structural composition of the economy of each region plays a role in its development (however, location shifts occur within all sectors)
• whether a region gains or loses depends largely on the local conditions, such as political institutions, regional policy assistance, infrastructure, supply of skilled labour, social qualifications, factor prices and population density

According to Illeris, regional that will perform well are those which have economies characterized by expanding sectors such as oil production, high tech industries, producer services, up to date tourism and international organizations. This contrasts with regions that develop poorly when declining industries dominate the economy, such as agriculture, coal mining, steel, shipyards or port functions. Illeris further claims that his theory fits the pattern of emerging society more appropriately than do classical development theories.

Defence of the New Approach:

On the basis of the premise that Western Europe has, in recent decades, developed along the lines of a mosaic with some regions developing better than others instead of a strict core-periphery model is correct, the following points can be put forward in support of the new approach:

• the failure of centre and periphery theory to explain the factual regional development in Northern Europe since the foundation of the European Community (Peschel)
• the expected pattern of development did not materialize: not true that regions most favoured by the European integration process were those most densely populated and nearest to markets, thus being centrally situated and having highest economic potential (Peschel)

Finally, Stohr notes that a simple division into core and periphery does not fit a complex society any longer, that being a service society, and information society, flexible production, knowledge based society, and post-industrial economy.

Examples of Bottom-Up Development:

The two examples of "bottom-up" development examined briefly here are the Provence-Alpes-Cote-d'Azur (PACA) region in France and rural China.

Development in the Provence-Alpes-Cote-d'Azur (PACA) region in France is an example of a region in which recent prosperity is not due to the influences of "top-down" policies but rather Hansen claims as a result of the presence of a dynamic endogenous industrial milieu.

• the externally planned heavy industrial complexes and scientific technopoles had relatively little impact in terms of diffusing development on a regional basis
• the strong economic performance of the PACA has been associated with small and medium sized enterprises specialized in rapidly growing tertiary activities with a small degree of dependence on declining traditional heavy industries (Hansen)

In the case of rural China, Wu found that rural development had an combination of top-down and bottom-up strategies. In effect, China maintained both types of policies of planning from above and below with differing emphasis on each at different times. On the one hand were policies of decentralizing industrial activities to inland provinces (top-down, centrally directed) and on the other, with collective farming policies, it recognized local custom, social organization and traditional ties in its approach. Regional self reliance under collective ownership and decision making allowed for regional variations in the style of management and in selecting programs suitable for regional level development and available technology. This was done within national support systems that were flexible enough to allow adaption, adjustments and experimentation sympathetic to local conditions (Wu).

Conclusion:

It is easy for supporters of each approach to find fault with the opposing model however, it would be short sighted to dismiss one or the other model completely. On the one hand, supporters of the bottom-up approach can argue that the classical theory has not worked in all instances and has problems associated with it. On the other hand, to claim that Western Europe has developed in a mosaic patten instead of a core-periphery pattern is a sweeping statement and one that can be assailed by supporters of the classical theory. One can also point to examples of successful core-periphery regional development and dispute the existence of a mosaic pattern.

An alternative to the two approaches examined here is to assume that both can occur at the same time. To summarily dismiss one in favour of the other is ill-advised: it is doubtlessly possible to find evidence to support and refute either model. It may be advantageous to proceed with the understanding that both models will apply to varying degrees in different regions in Western Europe. Furthermore, there will be situations in which one model will be more appropriate than the other as one model cannot apply in all situations.

As a regional development approach, bottom-up can be said to leave things to chance. A region or sector will do well or not depending on how well it can respond to changing conditions. However, leaving things to chance is politically risky and hence, top-down can be said to be more certain in its outcomes, not-with-standing, its failures. There may be a role for both approaches, one to let things happen and the other to make sure that certain things happen. It may be more important to discover why a region is succeeding or failing and then decide what intervention is needed, where, and when and then decide on the appropriate approach.

Hansen, N. "Innovative Regional Milieux, Small Firms and Regional Development: Evidence from Mediterranean France" Annals of Regional Science, 64, 1990.

Illeris, Sven, "An Inductive Theory of Regional Development" Papers in Regional Science, 72, 2, 1993.

Peschel, Karin, "European Integration and Regional Development in Northern Europe", pp. 39-72 in Development From Above or Below?, Walter B. Stohr and DR Fraser Taylor eds., John Wiley and Sons: Chichester, UK: 1981.

Wu, Chung-Tong and David F. Ip, "China: Rural Development- Alternative Combinations of Top-Down and Bottom-UP Strategies" pp. 155-82 in Development From Above or Below?, Walter B. Stohr and DR Fraser Taylor eds., John Wiley and Sons: Chichester, UK: 1981.

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