Office hours: Mon 2-3:30, Tues. 3:30-5 Office hours M 2-3, T 1-2:30, W 4-5:30

Course meeting time and location

The course will meet on Tuesday evenings, 6:00-8:50 in the RESD seminar rooms 500-M and 500-Q in the RESD suite on the 5^th Floor of O’Leary Library.

Course description

Cities, states, and regions (such as New England, Southeast Asia, or the Caribbean) rise, develop, and decline. The recent economic flameouts of Southeast Asia and Russia, as well as the economic roller coaster New England has experienced since the early 1980s dramatically illustrate that prosperity can be fragile. This course explores the principles of economic development. There are big disagreements about how and why regions develop, so we look carefully at some of these debates. We draw on insights from a variety of social science approaches, including sociology and geography as well as economics. Although we particularly focus on the U.S. and New England economies, we also look at cases from places such as Japan, Mexico, and Italy, in order to learn from the comparisons. Throughout, we draw out lessons about how business, government, and the nonprofit sector can help (or hurt!) a region’s development.

Course requirements

This course is built around informed discussion and independent work by students. Doing the readings on time, attending class, and participating in discussion on the readings are absolutely required, because students need to do these things to get value from the class.

There are also take-home assignments due almost weekly throughout the semester. There are four kinds of assignments:

1) Exercises (two of them). We give you data, and you use the techniques you have learned to analyze them.

2) Memos (three of them). Based on a community or region you have picked, you gather information, analyze it, and report on it. The second and third memo each have three due dates--two for initial pieces of the memo, the third for the entire memo.

3) Take-home exam. Your chance to broadly discuss and apply the main concepts in the course.

The final grade will be approximately based on the following:

25% Class participation (PLEASE NOTE THAT ONE-QUARTER OF THE

GRADE IS CLASS PARTICIPATION)

10% Two exercises

45% Three memos (10% for Memo 1, 17.5% each for 2 and 3)

20% Take-home exam

Due dates of all assignments are given in the course schedule. Assignments turned in late will be graded down severely.

In all written work, we expect you to identify all sources of data, information, and ideas. When quoting or paraphrasing someone else’s work, cite the source. Our preferred form of citation is the author-date form. For example:

The data on firm size indicate that small business’s contributions to U.S. growth are actually relatively modest (Harrison 1994, Chapter 2).

Then at the end of the paper, have a complete list of references. For example:

Bennett Harrison. 1994. Lean and Mean: The Changing Landscape of Corporate Power in the Age of Flexibility. New York: Basic Books.

Using someone else’s information or ideas without citing the source is misleading, prevents a reader from following up on interesting ideas, and defeats the educational purpose of the assignments (which is to build on other people’s work to come up with your own ideas and conclusions). Please don’t do it.

Readings

We will make photocopied readings available to students. Some of the readings will be made available online.
SCHEDULE OF CLASSES AND ASSIGNMENTS

Week 1 (September 2): Posing the problem of regional development

What is a region? What is development?

READINGS:

Amartya Sen, Development as Freedom (New York: Anchor Books 1999)

Chapter 2, “The Ends and Means of Development”

ASSIGNMENTS:

Exercise 1 (Tracking and comparing economic growth) handed out

WEEKS 2-3: LONG RUN NEOCLASSICAL ANALYSIS OF REGIONAL DEVELOPMENT

Week 2 (Sept. 9): The location and growth of industry

Why do particular industries locate and grow in particular regions? Why did the textile industry first develop in Lowell (and elsewhere in New England) and not some other region? Why did the computer industry locate in Massachusetts and California? What factors are “exogenous” to this process and what factors are “endogenous?”

READINGS:

Lowell: The Story of an Industrial City, Thomas Dublin, Handbook 140, (Washington, D.C.: National Park Service, U.S. Department of the Interior)

Hekman and Strong - "The Evolution of New England Industry," New England Economic Review, (March-April, 1981).

Interview with Peter Hall, “Location, Location: A leading urbanist argues that when it comes to innovation, place really does matter,” Wall Street Journal; New York, N.Y.; Sep 25, 2000.

ASSIGNMENTS:

Exercise 1 due

Memo 1 assignment (Community overview) handed out

Week 3 (Sept. 16): Location Theory and the neoclassical approach to economics

Continuation of our discussion of why firms locate and grow in particular areas. How do linkages develop among firms? Agglomeration—linkages among firms and industries and the ideas of increasing returns to scale and external economies.

READINGS:

Case and Fair, “The Behavior of Profit-Maximizing Firms and the Production Process,” Chapter 7, Principles of Economics, 4^th Edition, (NJ: Prentice Hall 1996)

Blair and Premus - "Major Factors in Industrial Location: A Review," Economic Development Quarterly, (1987)

Natalie Cohen, “Business Location Decision-Making and the Cities: Bringing Companies Back,” Working paper, The Brookings Institution, Center for Urban and Metropolitan Policy, May 2000
ASSIGNMENTS:

Nothing due this week

WEEKS 4-6: LONG RUN ALTERNATIVE VIEWS OF REGIONAL DEVELOPMENT, PART 1

Week 4 (Sept. 23): Product cycle and profit cycle--bringing strategy into the picture

Businesses are proactive strategists, not just reactive “price-takers.” What are the implications for regional development?

READINGS:

Ann Markusen, Profit Cycles, Oligopoly, and Regional Development (Cambridge: MIT Press, 1987). Ch.1-4 (theoretical framework, pp.1-50) and Ch.8 (case study of Pittsburgh and steel industry, pp.73-100)

“Up from the Scrape Heap,” Business Week, July 21, 2003: 42-45 (an update on the U.S. steel industry from where Markusen left off)

ASSIGNMENTS:

Memo 1 due

Memo 2 assignment (The community’s key industries) handed out

Week 5 (Sept. 30): Competitive advantage

How does a region get to be (and STAY!) “good” at a particular industry or type of product?

READINGS:

Michael Porter, “The competitive advantage of nations,” Harvard Business Review, March-April 1990, 73-93.

William Lazonick, “Industry clusters vs. global webs: Organizational capabilities in the U.S. economy.” Industrial and Corporate Change, Vol. 2, No.1, 1993

Chris Tilly, “State-level strategy for developing base industries: A Massachusetts case study.” New England Journal of Public Policy Vol.19, No.1, 1993.

Joel Kotkin, “The declustering of America.” Wall Street Journal, 8/15/02, p.A12.

ASSIGNMENTS:

Memo 2, part A (identifying key industries) due

Week 6 (Oct. 7): Models of Growth and environmental impacts of growth

READINGS:

William Easterly, The Illusive Quest for Growth, (Cambridge: MIT Press, 2001) Ch. 2. 3, 8, and 9.

Environmental impacts:

John Miller, “The wrong shade of green: Orthodox economics puts profits before sustainability,” Dollars and Sense, April 1993, pp.6-9—

Porter and van der Linde - "Green and Competitive," Harvard Business Review, (July/Aug., 1995).

ASSIGNMENTS:

Memo 2, part B (appointment to interview industry spokesperson) due

WEEKS 7-8: INTERLUDE ON SECTORAL ANALYSIS

Week 7 (Oct. 14):

What is a sectoral study? How is a sectoral study conducted?

READINGS:

“Sectoral Strategies: Targeting Key Industries,” Beth Siegel, Adrew Reamer and Mona Hochberg, Commentary, Winter 1987

A. Markusen, “Studying Regions by Studying Firms,” Professional Geographer, vol. 46, no. 4, 1994.

ASSIGNMENTS:

Work on Memo 2

Week 8 (Oct. 21):

Examples of sectoral studies.

READINGS:

Lisa R. Peattie, “What is to be done with the “Informal Sector:” A case study of shoe manufacturers in Colombia,” in Helen Safa, ed., Towards a Political Economy of Urbanism, New Delhi: Oxford University Press, 1981.

Robert Forrant and Erin Flynn, “Seizing agglomeration's potential: The greater Springfield, Massachusetts metalworking district in transition, 1986-1996.” Regional Studies 32: 209-22, 1998.

ASSIGNMENTS:

Memo 2 (full memo) due

Take-home midterm handed out

WEEKS 9-11: LONG RUN ALTERNATIVE VIEWS OF REGIONAL DEVELOPMENT, PART 2

Week 9 (Oct. 28): Alternative views of business decision-making and the role of institutions in economic development

More exploration of how businesses make decisions that have an impact on regions. How do local institutions influence the economic advantages of a region?

READINGS:

Institutional/strategic: Chris Tilly and Charles Tilly, Work Under Capitalism (Boulder, CO: Westview Press, 1997), Ch.5, “Employers at work,” pp.95-114

Robert D. Putnam, “The Prosperous Community: Social Capital and Public Life, The American Prospect, Spring 1993

Susan Christopherson, “Why do national labor market practices continue to diverge in the global economy? The ‘missing link’ of investment rules.” Economic Geography Vol. 78, No.1, January 2002, pp.1-20.

ASSIGNMENTS:

Memo 3 assignment (Recommendations for a key industry) handed out

Midterm due

Week 10 (Nov. 4): Comparative advantage and trade

Is free trade always a good thing? Ever a good thing? Why do almost all economists and Bill Clinton and George W. Bush love free trade?

READINGS:

Chapter 34 in William J. Baumol and Alan S. Blinder, Economics: Principles and Policy, 7^th Edition, NY: Dryden Press 1997.

Arthur MacEwan, “The new evangelists: Preaching that old time religion.” Dollars and Sense, November 1991

ASSIGNMENTS:

Work on Memo 3

Week 11 (Nov. 18): Globalization

How much of a change is the globalization of the economy--and is it a change for the worse or the better? What are the implications for regional growth?

Gary Burtless, Robert Lawrence and Robert Litan, Globaphobia, (Washington, DC: Brookings Institution 1998), Ch. 1

Joseph Stiglitz, “Globalism's Discontents,” The American Prospect, January 14, 2002 Available on the web at http://www.globalpolicy.org/globaliz/econ/2002/0114stiglitz.htm

William Tabb, “Globalization is an issue, the power of capital is the issue,” Monthly Review, Vol.49, No.2, 1997, pp.20-30.

The following short pieces are optional. They are provocative and will help stimulate discussion, but if you are pressed for time, you do not need to read them.

Alice Amsden, ”Ending Isolationism,” Dissent vol.27 no. 2 Spring 2000 p. 13-16.

Walden Bello, “From Melbourne To Prague: The Struggle For A Deglobalized World,” Talk delivered at a series of engagements on the occasion of demonstrations against the World Economic Forum (Davos) in Melbourne, Australia, 6-10 September 2000

ASSIGNMENTS:

Memo 3 Part A (literature review on the sector) due

WEEK 11: SHORT RUN GROWTH

Week 12 (Nov. 25): Short run economic growth

What causes booms and recessions in a region? How important is the role of national business cycles played out in the region, and how important are key industries in the region?

READINGS:

Moscovitch - "The Downturn in the New England Economy: What Lies Behind It?" New England Economic Review, (July/Aug. 1990).

ASSIGNMENTS:

Exercise 2 (Shift-share analysis) handed out

WEEKS 12-13: CITIES AND NEIGHBORHOODS

Week 13 (Dec. 2): Cities

What forces affect the economies of the small regions that we call cities? What approaches to urban revitalization have succeeded?

READINGS:

Henry R. Richmond, “Metropolitan Land-Use Reform: The Promise and Challenge of Majority Consensus,” in Bruce Katz, ed. Reflections on Regionalism, Washington D.C.: Brookings Institution Press, 2000

H. V. Savitch and Paul Kantor, “Urban Strategies for a Global Era: A Cross-National Comparison,” American Behavioral Scientist, Vo. 46 No. 8, April 2003: 1002-1033

Michael E. Porter, “The Competitive Advantage of the Inner City,” Harvard Business Review (May/June, 1995):55-71.

Merrill Goozner, “The Porter Prescription,” The American Prospect, May/June 1998, p. 56-64.

ASSIGNMENTS:

Exercise 2 due

Week 14 (Dec. 9): Neighborhoods

What can be done to revitalize poor neighborhoods?

READINGS:

Stephan Michelson, “Community-based development in urban areas,” in Robert Friedman and William Schweke, editors, Expanding the Opportunity to Produce: Revitalizing the American Economy through New Enterprise Development (Washington, DC: Corporation for Enterprise Development, 1981).

Michael Teitz, “Neighborhood economics: Local communities and regional markets,” Economic Development Quarterly, Vol.3, No.2 (May 1989), 111-122.

Ronald Ferguson and Sara Stoutland, “Reconceiving the Community Development Field” in Ronald F. Ferguson and William T. Dickens, eds. Urban Problems and Community Development, Washington, D.C.: Brookings Institution Press, 1999.

ASSIGNMENTS:

Memo 3 part B (interview with an industry source on topics covered in part A) due

Week 15 (Dec. 16): Catch-up and clean-up

This is during exam period. There is no final exam in this class. We will decide as a class whether or not to meet during this time to catch up on material that we may not have completed, and work on problems people are having with the final aspects of Memo 3.

ASSIGNMENTS:

Completed Memo 3 due December 19, during exam period

There is no final exam