Civic commuity approaches to rural development in the South: Discussion

Journal of Agricultural and Applied Economics, Aug 2002 by Henry, Mark S

Summary

The proposed CCM is not really a model in the sense of depicting why and how labor, businesses, and governments make decisions that affect the pace of economic development in the rural South. If the CCM is shocked with more small establishments and fewer large ones in a rural county of the South, what would one expect to happen? How will decisions by firms to expand or contract or by households to stay or leave the county be affected, controlling for other economic and social forces at work in the economic growth process? How is the size distribution related to the social capital in a community? What is the direction of causality, social capital to size distribution or vice versa?

It is evident from economic growth models across nations that institutions and social forces matter a lot. What is not so clear yet is how they matter in the rural South. The authors make an important contribution by emphasizing the issue. What remains is to embed the social relations in the rural South into an economic model of growth that will allow reliable tests of alternative hypotheses of the role of social capital in rural economic development. This requires a hard look at how social capital affects behavior of firms, households, and government within the framework of a neoclassical model.

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