A Consumption Base Theory of Development: An Application to the Rural Cultural Economy

Ann Markusen
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Ann Markusen: University of Minnesota

Agricultural and Resource Economics Review, 2007, vol. 36, issue 1, pages 9-23

Abstract: Export base theory, which posits that overall regional growth is a function of external sales of locally produced goods and services, dominates economic development practice. But the con-sumption base can also serve as a growth driver, especially in small towns and rural areas. Lo-cal investments may induce residents to divert expenditures into local purchases, attract new and footloose residents and tourists, and revitalize aging town centers. A consumption base approach is not reducible to import substitution, but seeks to serve latent demand and alter the broad portfolio of goods and services purchased locally. I present the analytics for a consump-tion base theory and demonstrate how cultural investments prompt regional growth, empha-sizing the role of artists as catalysts. Three types of arts and cultural investments are explored: artists’ centers, artists’ live/work spaces, and performing arts facilities, with examples from rural and small town settings. I conclude with rural cultural strategy recommendations.

Keywords: economic base; consumption; cultural investments (search for similar items in EconPapers)

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