Water Resources and Regional Economic Growth in the United States, 1950-1960

Abstract

The role of natural resources in facilitating or restraining economic growth has been a topic of interest and debate among economists since Malthus and Ricardo. One interesting body of research has attempted to determine the importance of long run diminishing returns caused by increasing resource scarcity [e.g. Barnett and Morse, 1963; Potter and Christy, 1962]. Another large body of work from von Thiinen and Weber to the present has been concerned with the determinants of the spatial distribution of economic activity, among them natural resource endowments and transportation possibilities [e.g. L6sch, 1954; Isard, 1956]. Most of these works, however, have not dealt with water as a constraint on growth or as a locational determinant. The major reasons for ignoring water may have been that, in many regions, water historically has been very nearly a free good and that very few good statistics on water costs and uses have been available. This paper attempts to marshal available, albeit imperfect, evidence on the relationship between water availability and economic growth in the United States over the 19501960 decade. Since water resource investments are currently being planned on a very large scale as tools for promoting regional economic development (e.g. Appalachia and the Southwest) and since past water resource developments have frequently been defended in terms of their favorable impact on regional development [Tennessee Valley