Rising Energy Prices and Regional Economic Development

Abstract

Traditionally, development planners and policymakers have based their activities and programs on the export base theory embedded in a Clark-Fisher development model. The propulsive force of economic development in the model is technological progress and the gains in productivity that new technology engenders. A review of the model shows that it stands up well when used to explain the pattern of regional development in the United States between the Civil War and the beginning of World War II. The most immediate impact of the energy crisis (on the fiscal positions of various states) is discussed first; then the impact on the location of industry is analyzed briefly. The author points out that two major regional development programs started in the 1960s--the Appalachian Regional Commission and the Economic Development Administration--have not been outstandingly successful in reducing interregional disparities. He concludes that ''neither conventional regional development policies nor reliance on market forces will permit the nation to cope with the difficulties that will be faced by energy-poor, highly industrialized regions. New policies will have to be devised to help these regions adjust to the structural changes which further increases in energy prices are almost certain to engender.'' (MCW)