Regional Economics, Export Base Model, Regional Planning

1. DASTGIRALAM
DEPARTMENT OF ECONOMICS
ALIGARH MUSLIM UNIVERSITY
ALIGARH

2.  Douglas C. North (born 1920)
 Believes in role of exogenous factors in Regional
Growth
 Assumed that regions are not closed areas but
open
 Goods and services can flow from one region to
another
 Export is everything, which can be exported
 Emphasis, particularly on the development of
export sectors (multiplier effect)

3.  Growth of a region depends on its Export Base
 Export base is largely limited to the expansion of
demand in another region
 Increased export of a region, increases the
income of its people
 Increased income increases the productive
capacity and hence expands the economic
activities in the region

5.  Pillars of Export Growth Model:
• Area with a common export-base
• Regional growth is determined by the
success of its export sector
• Export-base led absolute and relative
income of the region, decides the services
and the residential potential of the area

6.  Increase in the export of a Region may be
based on;
• Increase in PCI of other region
• High income elasticity of exportable items in
other regions
• If income elasticity is low or negative, export
increases because of increase in income and
population

7. • Depletion of resources in other region with the
help of that other regions were producing same
goods
• Lower delivery cost of exportable items based on
improved transport/infrastructure
• Based on technological changes, new use of
exported items in other region
• More production of exportable goods and services
in the region led by technological changes

8.  Criticism:
• Undue importance to export sector and ignoring
the importance of internal/domestic growth
potential of the region
• If export earning is used for imports payment, no
development will take place
• Issues related to tariff, exchange rate and proper
government policies may spoil the game