Rural Change: Markets, Governance and Quality of Life
The factors that contribute to successful regional economic development are not fully understood. Traditional models have been developed which emphasize increasing exports as a strategy for increasing regional income. More recently the role of import substitution has been explored with the rise of "buy local" programs. The fundamental relationship between increasing exports and decreasing imports is not sufficiently understood. Additionally, neoclassical growth theory and endogenous growth theory both ignore the role of imports and exports altogether and focuses on productivity gains as the sole driver of economic growth. On a very macroeconomic sense, this may be true, as on a global scale exports go to zero and all growth is accounted for by productivity gains. However, on the other extreme for very small communities productivity gains are not
likely to be large contributors to an increase in the regional income while the expansion of the exporting economic base industries explain the majority of the growth. The exact functional relationship between these forces is not understood. Improving human well-being and community quality of life represent two fundamental goals of development efforts. Thus, an understanding of attributes and forces that enhance or detract from individual and household well-being and/or from community quality of life is important for guiding decision-making on policy. The research will lead to increased knowledge of the forces impacting rural communities in terms of labor markets, industry, governance, and quality of life. The impact of this research will be seen in better understanding among community leaders and citizens of the dynamics of labor markets and businesses and their effects on rural
communities. Without this research, decision makers in communities will be more likely to base decisions on outdated or imprecise notions of the causes of changes in the economic and fiscal situation of rural communities. Without understanding the causes of local fiscal stress, it is difficult for citizens and policy makers to make informed decisions on taxes and expenditures. Finally, without better understanding of the role of quality of life in location decisions, communities would be less able to guide their economic development efforts and sustain themselves in the face of change.