This document discusses Douglas North's export-base theory of regional economic growth. It states that North believed regions are open and interconnected, with goods and services flowing between them, and that a region's growth depends on the expansion and success of its export sector. Increased exports lead to increased regional income, production capacity, and overall economic activity. The pillars of the export-base model are that a region shares a common export base and its growth is determined by its export sector's performance. Criticisms include that the model gives undue importance to exports over domestic growth potential and ignores issues like tariffs and government policies.

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