economic
Local and regional economic development in urban and rural settings
LED is often connotated with urban development, for the simple reason that one encounters it more often in medium and large cities than in small towns, let alone villages. Things are different when it comes to regional economic development. In developing countries, integrated development projects in rural areas were probably much more frequent than regional development exercises in urban agglomerations. As far as the development of urban agglomerations was concerned, establishing a practice of zoning was already quite an achievement, and implementing it was a nightmare in all those cities where squatter settlements spring up over night. Planning and development efforts beyond zoning were rather rare; one of the few cases is the Greater ABC region in the south of São Paulo, Brazil.
<case study>
Is the prevalence of LED in urban agglomerations and regional development in rural regions a coincidence, or does it reflect necessities, restrictions and opportunities? There are strong arguments in favor of the latter view. LED at the level of a small city, say of 10,000 inhabitants, makes little sense, in particular in developing countries with their less differentiated economic systems. It is unlikely that it is possible to have a critical mass for the creation of a competitive advantage at this level. Things are different when it comes to somewhat larger rural regions. The case study on Mafra shows that there can be a lot of latitude for the creation of differentiated products, even when working with poor families with limited skills.
At the same time, regional development in urban agglomerations, while often appearing highly plausible, tends to suffer from major problems. It appears plausible when administrative borders do not reflect economic realities, and when neighboring cities which are economically interlinked should pursue a joint effort to create a locational advantage. It also appears plausible in those regions where neighboring cities are involved in a kind of beggar-thy-neighbor policy, for instance by trying to lure companies away from the next city by offering tax incentives.
But the problems are often bigger than the opportunities. Mayors and city councils are accountable to their local constituency, which often will not appreciate if jobs are created in the next city for the sake of economic welfare of the region. Apart from that, creating governance structures at the regional level is a major challenge. Moreover, the bigger and more differentiated the region becomes, the more complex, and thus the more difficult to design and implement, economic development strategies become.
