Path Dependence and the Evolution of a Patchwork Economy: Evidence from Western Australia, 1981–2008

Abstract

Within economic geography, the use of evolutionary concepts is gaining increasing traction in our understanding of the dynamics of capitalist space economies. There is an emerging literature exploring the nature of the processes driving path dependence on the assumption that such a process actually exists. In contrast, here, we consider the logically prior question of whether path dependence exists and how we might detect it at the regional scale. In the context of the emergence of evolutionary thinking, we consider the efficacy of the notion of path dependence for the analysis of local economic development. Our contribution is both conceptual and methodological, exploring the possibilities and limitations of employing contemporary econometric techniques to identify path dependence. To stress test our empirical model, we ground our analysis in the context of the dynamics of the peripheral resource-dependent and export-oriented economy of Western Australia over the course of the recent resource boom. The case study provides evidence of path dependence, supporting the relevance of evolutionary thinking in economic geography.