The Urban economic Base in a Trans‐Border setting: A case study of two towns

Abstract

The purpose of this study is to analyze the differences in the economic bases of two small towns, each tributary to nearby metropolitan areas, on either side of the U.S.-Mexico border. Thus, it combines the policy concerns of small town economic development (Alguire et al. 1987) with a social scientific interest in cross-cultural differences. Small towns face certain common problems independent of which side of the border they are on - social stratification, limited shopping opportunities, non-dynamic leaders (more ambitious residents have frequently invested their talents elsewhere), limited employment opportunities and anemic tax bases. Nevertheless, the international border does impose cultural and structural differences which are reflected in differences in the flows of capital, labor and consumption expenses. For example, Mexican rural society is poorer, less residentially mobile, less diurnally mobile and more socially tied to the local community than is the case in the U.S. Also, jobs in government service and income from transfer payments are less available in the average Mexican town than in the average U.S. town. Because of these differences people in the Mexican town are likely to purchase lower-order goods and services, spend more money locally and be less directly dependent on the government or on private pensions, for their livelihood, than their counterparts in the U.S. town. Understanding the fundamental patterns of income flows into and out of the community is a task that economic base analysis is uniquely designed to meet. Here, a modified form of the Tiebout (1962) procedure will be used to trace the basic income flow into and out of establishments and households. A town's economic viability will depend on the magnitude of the difference between the inward and outward flows. The study will analyze a town in south Texas and a town of similar characteristics in northern Coahuila. Economic base analysis in this study will refer both to the study of such exogenous income, and to the study of household and establishment expenditure patterns which determine the degree of income recycling within the local region (the multiplier).