Civic community approaches to rural development in the south: Economic growth with prosperity

Journal of Agricultural and Applied Economics, Aug 2002 by Robinson, Kenneth L, Lyson, Thomas A, christy, Ralph D

The free market-based policies of the corporate community model have skewed economic development across the South. For many small, rural communities, the consequences of global capitalism have resulted in declining real wages, high underemployment, and increasing rates of income inequality. Backed by recent scholarship and grassroots movements that suggest that both civic engagement and the presence of smaller-scale, locally controlled enterprises can help determine whether communities prosper or decline, this paper explores the links between social structure and rural development in the South. The goal is to expand our understanding of civic community theory as an alternative to the neoclassical economic model of development. Using a local problem-solving framework, we suggest that a departure from the traditional, neoclassical path of development is in order. We conclude that rural policy makers must establish a role for civic community in the rural development process if they wish to protect the welfare of workers and communities, while increasing the prospects of economic growth with prosperity.

Key Words: civic community, economic growth, rural development, social capital, Southern United States

JEL Classifications: R11, O21, R58

Since the end of World War II, neoclassical economic theory has been the dominant framework used to guide public decisions related to economic development policy. Convinced that greater efficiency can be achieved by removing the state as much as possible from any role in regulating the marketplace, policy makers generally favor free trade, minimal regulation, and heightened competition as the best prescription for economic growth. Left with few choices but to play the global development game, rural communities are forced to amass arsenals of business incentives in hopes of attracting jobs. Global capital flows to places that offer the highest return on investment. Much like a high-stakes poker game, one community's incentives are bid against another community's incentives in an effort to win a new employer, a new shopping mall, or some other corporate-directed enterprise. Of course, this game has no winners. Communities that offer incentives of one sort or another and fail to stimulate economic growth are losers. So too are localities that get carried away in their efforts to attract new businesses and sweeten the pot too much. These communities often find that they have bartered away their ability to improve the lives of their most disadvantaged residents. Rural communities and small towns, because they have less to offer prospective employers, are clearly placed in a structurally disadvantaged position vis-a-vis larger urban places. For many Southern communities and residents alike, the consequence of relying heavily on market-based solutions to address rural development issues has often resulted in economic restructuring, plant shutdowns, and corporate downsizing. Thus, many rural communities have become trapped at the bottom of a system that they unwittingly helped to create (Fasenfest; Lyson 1989).

In an effort to examine alternative paradigms of economic development, we explore the links between local social structure and rural economic development in the South. The goal of this paper is to expand our understanding of civic community theory and its potential as an alternative model for rural economic development in the region. In the first section, we provide an historical overview of the neoclassical model of development and associated consequences. We then introduce the civic community model and a body of theoretical and empirical literature that examines the role of civic community and its effects on communities. This section includes a comparison of both models, using two theoretical constructs to represent alternative development paths for Southern rural communities. Following this, we raise a series of questions regarding the civic community framework and its role in the rural economic development process. Finally, we conclude with several implications for Southern rural development policy.

Alternative Models of Rural Economic Development

Over the years, economists and other social scientists have developed several regional growth theories to shed light on the phenomena of economic growth and decline. Originally, many of these theories were framed to explain the economic growth in lesser-developed countries, but some have been used to examine economic growth and development, or lack thereof, in the United States as well. For the purpose of this paper, the definition of rural economic development is not limited to economic activity (i.e., additional jobs and income), but includes activities aimed at improving the overall quality of life and addressing issues of equity and community well-being. In this section, we compare the community effects of two models of development, what Lyson (in press) calls the "corporate community model" (the free markets neoclassical paradigm) and the civic community model. We begin with the corporate community model.