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Natural Resources and Regional Development: An Assessment of Dependency and Comparative Advantage Paradigms

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  • Thomas Gunton

Abstract

The role of natural resources in regional development is the subject of a debate between dependency theorists, who argue that natural resources impede development, and comparative-advantage theorists, who argue that resources can expedite development. This debate is assessed by a case study analysis of the impact of resource development on a regional economy. The case study uses a model to estimate the comparative advantage of the resource sector. The results show that natural resources have the potential to provide a significant comparative advantage relative to other economic sectors by virtue of generating resource rent, which is a surplus above normal returns to other factors of production. The case study also shows that there are considerable risks in resource-led growth, including the propensity to dissipate rent and increase community instability by building surplus capacity. These risks are amenable to mitigation because they are largely the result of poor management of resource development. The case study demonstrates that the most productive analytical approach for understanding the role of natural resources in the development process is a synthetic approach, which combines the insights of the dependency and comparative-advantage paradigms into a unified framework. It also demonstrates that the concept of resource rent, which has frequently been ignored in development theory, must be reintegrated into the unified framework to improve the understanding of the role of natural resources in the regional development process.

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  • Thomas Gunton, 2003. "Natural Resources and Regional Development: An Assessment of Dependency and Comparative Advantage Paradigms," Economic Geography, Taylor & Francis Journals, vol. 79(1), pages 67-94, January.
    • Handle: RePEc:taf:recgxx:v:79:y:2003:i:1:p:67-94
    DOI: 10.1111/j.1944-8287.2003.tb00202.x
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    2. Maria S. Tysiachniouk, 2020. "Disentangling Benefit-Sharing Complexities of Oil Extraction on the North Slope of Alaska," Sustainability, MDPI, vol. 12(13), pages 1-31, July.
    3. Barreto Nieto, Carlos Alberto & Linares, Jose & Armenta, Rosa María, 2011. "Natural resources royalties and local development in Colombia," MPRA Paper 45786, University Library of Munich, Germany.
    4. Bowe, Scott A. & Marcouiller, David W., 2007. "Alternative tourism-timber dependencies and the development of forested rural regions," Forest Policy and Economics, Elsevier, vol. 9(6), pages 653-670, February.
    5. Mounir Amdaoud, 2019. "Ressources naturelles, innovation et développement économique : vers une nouvelle approche," Working Papers hal-02136083, HAL.
    6. Lopes, Alef & Ruiz, Ricardo & Ribeiro, Rafael & Cantelmo, Weslley, 2023. "Linkages in the metal mining industry: Local job multipliers in Brazil," Resources Policy, Elsevier, vol. 82(C).
    7. Stjernström Olof & Pettersson Örjan & Karlsson Svante, 2018. "How Can Sweden Deal with Forest Management and Municipal Planning in the System of Ongoing Land-Use and Multilevel Planning?," European Countryside, Sciendo, vol. 10(1), pages 23-37, March.
    8. Yan Zhang & Hailin Qu & Yingzhi Guo, 2011. "A Study of the Agglomeration of China's Convention Industry: An Economic and Neo-Economic Geography Framework Approach," Tourism Economics, , vol. 17(2), pages 305-319, April.
    9. Dinh, Huong & Pearson, Leonie, 2015. "Specifying community economic resilience - a framework for measurement," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202523, Australian Agricultural and Resource Economics Society.
    10. Gunton, Cameron & Markey, Sean & Werker, Eric, 2021. "Evaluating British Columbia's economic policies for liquefied natural gas development," Energy Policy, Elsevier, vol. 151(C).
    11. Gunton, Cameron & Markey, Sean, 2021. "The role of community benefit agreements in natural resource governance and community development: Issues and prospects," Resources Policy, Elsevier, vol. 73(C).
    12. Fleming, David A. & Measham, Thomas G., 2014. "Local job multipliers of mining," Resources Policy, Elsevier, vol. 41(C), pages 9-15.
    13. Modrego, Félix & Berdegué, Julio A., 2015. "A Large-Scale Mapping of Territorial Development Dynamics in Latin America," World Development, Elsevier, vol. 73(C), pages 11-31.
    14. Huong Dinh & Ben Freyens & Anne Daly & Yogi Vidyattama, 2017. "Measuring Community Economic Resilience in Australia: Estimates of Recent Levels and Trends," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(3), pages 1217-1236, July.
    15. Daniel Raimi & Emily Grubert & Jake Higdon & Gilbert Metcalf & Sophie Pesek & Devyani Singh, 2023. "The Fiscal Implications of the US Transition Away from Fossil Fuels," Review of Environmental Economics and Policy, University of Chicago Press, vol. 17(2), pages 295-315.
    16. Sean Markey & Sarah-Patricia Breen & Kelly Vodden & Jen Daniels, 2015. "Evidence of Place: Becoming a Region in Rural Canada," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 39(5), pages 874-891, September.
    17. Terheggen, Anne, 2010. "The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain," MPRA Paper 37982, University Library of Munich, Germany.
    18. Obaya, Martín & López, Andrés & Pascuini, Paulo, 2021. "Curb your enthusiasm. Challenges to the development of lithium-based linkages in Argentina," Resources Policy, Elsevier, vol. 70(C).
    19. Laura A. Reese & Minting Ye, 2011. "Policy Versus Place Luck: Achieving Local Economic Prosperity," Economic Development Quarterly, , vol. 25(3), pages 221-236, August.
    20. Thomas Moritz & Thomas Ejdemo & Patrik Söderholm & Linda Wårell, 2017. "The local employment impacts of mining: an econometric analysis of job multipliers in northern Sweden," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 30(1), pages 53-65, April.
    21. Sergiy Smetana & Christine Tamásy & Alexander Mathys & Volker Heinz, 2015. "Sustainability and regions: sustainability assessment in regional perspective," Regional Science Policy & Practice, Wiley Blackwell, vol. 7(4), pages 163-186, November.
    22. Terheggen, Anne, 2011. "The tropical timber industry in Gabon: a forward linkages approach to industrialisation," MPRA Paper 37976, University Library of Munich, Germany.
    23. Osama Elsalih & Kamil Sertoglu & Mustafa Besim, 2021. "Determinants of comparative advantage of crude oil production: Evidence from OPEC and non‐OPEC countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3972-3983, July.
    24. Bjørnar Sæther & Eivind Merok, 2019. "The Construction and Deconstruction of a Norwegian Forest Industrial Regime 1980-2017," PEGIS geo-disc-2019_04, Institute for Economic Geography and GIScience, Department of Socioeconomics, Vienna University of Economics and Business.
    25. Lotte Dalgaard Christensen, 2023. "A Bayesian game of resource exploitation in hinterland regions: modelling scenarios for sustainable development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(1), pages 277-296, January.

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