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A Consumption Base Theory of Development: An Application to the Rural Cultural Economy


  • Markusen, Ann


Export base theory, which posits that overall regional growth is a function of external sales of locally produced goods and services, dominates economic development practice. But the consumption base can also serve as a growth driver, especially in small towns and rural areas. Local investments may induce residents to divert expenditures into local purchases, attract new and footloose residents and tourists, and revitalize aging town centers. A consumption base approach is not reducible to import substitution, but seeks to serve latent demand and alter the broad portfolio of goods and services purchased locally. I present the analytics for a consumption base theory and demonstrate how cultural investments prompt regional growth, emphasizing the role of artists as catalysts. Three types of arts and cultural investments are explored: artists' centers, artists' live/work spaces, and performing arts facilities, with examples from rural and small town settings. I conclude with rural cultural strategy recommendations.

Suggested Citation

  • Markusen, Ann, 2007. "A Consumption Base Theory of Development: An Application to the Rural Cultural Economy," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 1), pages 1-15, April.
  • Handle: RePEc:ags:arerjl:10164

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    References listed on IDEAS

    1. Charles M. Tiebout, 1956. "Exports and Regional Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 64, pages 160-160.
    2. Jung, Woo S. & Marshall, Peyton J., 1985. "Exports, growth and causality in developing countries," Journal of Development Economics, Elsevier, vol. 18(1), pages 1-12.
    3. Vijay K. Mathur, 1999. "Human Capital-Based Strategy for Regional Economic Development," Economic Development Quarterly, , vol. 13(3), pages 203-216, August.
    4. Isserman, Andrew M. & Beaumont, Paul M., 1989. "New directions in quasi-experimental control group methods for project evaluation," Socio-Economic Planning Sciences, Elsevier, vol. 23(1-2), pages 39-53.
    5. George A. Erickcek & Hannah McKinney, 2004. "Small Cities Blues: Looking for Growth Factors in Small and Medium-Sized Cities," Upjohn Working Papers and Journal Articles 04-100, W.E. Upjohn Institute for Employment Research.
    6. Douglass C. North, 1955. "Location Theory and Regional Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 63, pages 243-243.
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    Cited by:

    1. Todd Gabe & Richard Florida & Charlotta Mellander, 2012. "The Creative Class and the crisis," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 6(1), pages 37-53.
    2. Riccardo Cappellin, 2016. "Investments, balance of payment equilibrium and a new industrial policy in Europe," ERSA conference papers ersa16p931, European Regional Science Association.
    3. Allen J. Scott, 2012. "The Cultural Economy of Landscape and prospects for peripheral development in the twenty-first century: the case of the English Lake District," Chapters,in: Cultural Commons, chapter 4 Edward Elgar Publishing.
    4. Gordon F Mulligan & Alex C Vias, 2011. "Place-Specific Economic Base Multipliers," Environment and Planning B, , vol. 38(6), pages 995-1011, December.
    5. Riccardo Cappellin, 2016. "Innovation and investments in a regional cross-sectoral growth model: A change is needed in European cohesion policies," ERSA conference papers ersa16p991, European Regional Science Association.
    6. Markusen, Ann, 2007. "An Arts-Based State Rural Development Policy," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 0(Issue 1), pages 1-3.
    7. Guimarães, Maria Helena & Sousa, Carlos & Dentinho, Tomaz & Boski, Tomasz, 2014. "Economic base model for the Guadiana estuary, Portugal an application for Integrated Coastal Zone Management," Marine Policy, Elsevier, vol. 43(C), pages 63-70.
    8. Delphine Guex, Olivier Crevoisier, 2017. "Post-industrial globalization and local milieus: A typology," Diskussionsschriften credresearchpaper15, Universitaet Bern, Departement Volkswirtschaft - CRED.
    9. André Torre & Frederic Wallet Wallet, 2013. "The role of proximity relations in regional and territorial development processes," ERSA conference papers ersa13p792, European Regional Science Association.

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