Regional | and] OC al Economic Analysis Practitioners fourth edition Avrom nnayia -Val | f\ / La “lage ele 1 sivons ery and docu PRA EGE IER, eeLibrary of Congress Cataloging-in-Put ion Data Bendavid-Val, Aviom Regional and local economic analysis for practi Bendavid-Val 4th ed poem. Inctades bibliographical references and index. ISBN 0.275.93520:5 (alk. paper) — ISBN 0-275.937S1.8 (pbk.: alk. paper) I. Regional economics. 2. Economie zoning, 1. Tile, HT391.538 1991 338.9670 9.41092 ners Avram British Library Cataloguing ie Publication Dat i avaiable ‘Copyrighi © 1991 by Avrom Benéavid-Val Al rights reserved. No portion of this book may be reproduced, by any process or technique, ihout the ‘express weitten consent of the publisher. Library of Congress Catalog Card Number: 99-81092 ISBN: 0-275.93520-5 tho.) (0-275.93751-8 (pbk) First published in 1991 Praeger Publishers, One Madison Avenve, New York, NY 10010 ‘An imprint of Greenwood Publishing. Group. Ic. Printed in the United States of America eS ‘The paper wsed in this book complies with the Permanent Paper Standard iscved by the National Information Standards Organization (Z39.48-1984). 987654321 For Leah, who has never tet June go by, and for Naftali. Ronnit, and Oren whose generation their visions belie12 Intraregional Linkages and Flows ‘The discussion of linkage investigations, low studies, and Iriction analysis ia Chapter 6 emphasized the importance of understanding actual and potential interactions between the region and other areas, and of wrxterstanding also the factors that inhibit such interactions. Ifthe essential equation for regional eco- nomic growth ss increasing texsins fon regional exports and multiplying the ned within the region, then economic interactions between the rezion aad aiher areas have mujoe analytical importance, particularly because they are the source oF export rewins Linkages among subunits in the region, their associated Nows, and factors inhibiting Hows hive majar analytical importance, particularly because they vechanismys throng which eexioneal income sa emmployarent are vveltiplie ‘The essential questions aublressed by intraregiowal Hk investigations are: What are the major types of Hinkages, and their natares aed magnitules, among subunits of the region? What volumes of economic goods, Row among nisjor points of origin and destination in the region? What are the inajor factors inhibiting productive economic interaction among subunits of the region? How do intearcgional enkages and flows of different types fit 0 ss eomponents of trl yroran (9 8 omic growth? ‘The basic methods for conducting linkage investigations, flow studies. and friction analysis were discussed in Chapter 6, and ate applicable to intraregional analysis as well as aggregate an! intertegional regional analysis. Some of the discussion in Chapter 11 concerning social accounts, economy composition anal- ysis, and natural esource assessments is also directly relevant to the subject of this chapter. Chapter 13 discusses in sea empl How, sual avtate ons Ane rent le140 ntraregional Analysis Aiplication, and therefore also bears dircetly on the subject of intraregionallink- ages, flows, and friction. Finally, Chapter 14, dealing with analysis of the regional settlement system, introduces a number of methods for exploring the roles and relationships among urban places in a region, This chapice prescniy some considerations additional to those discussed elsewhere in this book that come into play when linkages, flows, and friction are investigated intraregionally. ‘The reader concemed with the full story on the subject of this chapter will want to consult the other chaptcrs mentioned as welt LINKAGES, FLOWS, FRICTION ‘The introduction to Chapter 6 begins: ‘There is multitude of interregional linkages—physica, social, technological, pofitieal, institutional, and ecanomic—through which repions interact with each other. These in teractions, in ur, generate impulses that work ther way thiough the regional cennnmy bby means of an equally complex intraregiona linkage system. It may be more accurate to describe the intraregional linkage system, from the point of view of regional development analysis, as considerably more complex than the interregional linkage system. For purposes of aggregate analysis, the regional analyst has the luxury of viewing the region as a single entity that interacts with the rest of the world. All interregional flows originate or terminate as if at a single point, “the region," or a large urban place within the region that serves as a proxy for the region as a whole. The primary challenge is to figure out which interactions to explore and then to assemble the relevant ct ‘The same challenge confronts the analyst exploring intraregional interactions But in this case the challenge is complicated by the faet that a wider virety of Lypes of interactions may be iinmediately relevant to reginnal economic prot processes and are therefore of greater anslytical importance than wold he the case in aggregate analysis. Moreover, regiopal development planning cia inl ence a larger number of interaction factors internal to the region than external ‘iit; for this reason also more needs to he known about more types of inteareyienal linkages than interregional linkages. Figure 12.1 summarizes major categories of linkages among subunits of the region that may need to be explored in the course of intraregional analysis, As suggested in Chapter 6, experimentation with location quotients and related indicators can help point out the types of linkages and flows that wetrant further investigation. But in the context of intraregional analysis, the Hinkages and flows highlighted by preliminary exploratory techniques have to be understorxl as possibly only single dimensions of types of interaction systems that are important for purposes of regional development analysis. For example, an intraregional location quotient computation may reveal that a certain regional subarea markets a much smaller proportion of its maize, relative (0 the amount of its land in Intraregional Linkages and Flows + 14 Figure 12.1 Categories of Intraregionat 1 coger of tage lemcte nd F Tnlded Tansporaion Road, aera nd i wap ote nae oe Bec ok ‘ostinato aor pert targ, puters ofr overtly ad etrlsres red Communication| “Texgaphy semper, ad oer commaicnon media seven Sex af nara (ecedingsotasah peters aed Set of ey ono ad ‘aero serve wali eher pra formal ioral meh of lormaioe daxcainstioneiuay Scat tod yee of pascal Gveinaion pts wad wea Naval roars Nate enor neg cha rere dnngeaptems, wid caret, tip cimucieew' 6 so trenton in hse Pear uch gation ‘sca ht cess imerdepentcnis among scbarnt the vein Beomoaie "oa ner ae ing we ys Do an gs oral fans spt comet sens moyen Sa ead clin ay gonp pater Kip paceras peal sa bn or aang satreaty ar agen abies att srr eecaon an ining nines pele reseaeh a in aession yi pn portion ra Ne maize, than would be expected on the basis of region-wide proportions. Dacs this suggest the potential to expand a marketing linkag: regional exports, increase employment in 3 hhouselil incomes in dhe sus: of increased spending by these Faeen households? The msatce would seem worthy. of further investigation, But this may not he simply a maize marketing linkage question. Examples of important linkages at work oF not av work in this ease may he affinity group rave patterns; market information coommmunicationss fi al would at once raise cultural maeketin racial services networks and consumer trade patterns (in some ateas farm commodities se used a 2 For ‘of cash reserve for acquiring daily household needs): other commodity. tle Tinkages (the maize may be used for livestock feed sind the livestock in tur traded through unregistered channels) andl more, including, of course, transport linkages. How does the analyst kaow where to begin? ‘And then, the iatraregional analyst does not have the luxury of viewing the sogion as a single cifity, as a single point at which Nows originate or terminate In most regions there is a relatively large number of subunits aman,142+ Intraregional Analysis econewically beneficial interactions occur or could accur, Which interactions anvong which subunits should be explored? ‘There is a Lendency among regional analysts, especially those inclined to stivetual spatial analysis, to want to “document inraregional Tinkages”” and then anflyze the linkages as @ means of identifying worthwhile development projects, But it is easy 10 sce that documenting even just one major type of inkage or flow fom among exch category shown in Figure 12.1 among all subunits ina region would be a tak requiring a major commitment of unalytics! resources (Lime, money, and staff). Much of the data collected would provide Title more than a muinetical epresentaion of basi information that is realy nwa, Furthermore, the question to be addressed in intraregional analysis for development planning isnot where are there and where are there not differcat types of linkages and lows; rather, itis which are the linkages and flows that serveur could serve as important generators of regional income and employment, ain! how ean they be improved or encouraged? 1 aeldition © using preliminary exploratory anafytieal methods, the chal- lovige of determining the types of interactions that should be investigated among selected subunits of the region can be met by fornvulating a series of leading questions. The questions should be organized under regional eapons, intermediate impons, and consumer goods market este «they should bee strietured in hierorehieal pastes that lead analysis ffom general to svore specific issues. Figure 12.2 provides a sample list of leading questions that cay be used a8 a starting point for developing a similar list for a particular re tion, The appropriate set of questions for any region will depend upon the onsposition of the region's economy, its interactions with other areas, ant ther ynique characteristics ay level of question is addressed for all market categories before moving ‘ot questions at the next level. AS the answers to questions at each level ae developed, the significance ofthe answers for purposes of development planning, is avcessed; the implications for reforinulatinn of questions at the next Tevet in mre specifie terms (or passibly for their elimination) are considered: the rel tionship of questions at each level to counterpart questions in the other categories is npyraised; the usefulness of data in hand as against data that needs to be collected in the field is evaluated; and the types of linkages, flows, and friction factors that need to be investigated in progressively more detail on a priority bbacis can be determined, In other Words, the purpose of the feading questions is to move thinking throupt a process that systematically naerows and consolidates analytical foeus ‘on the actual and potential types of interactions among. specific subunits in the regio that are of priority concer, Generally, it will be found that this approach tends to dircet analysis to a limited number of linkages and interactions among 1 inmited number of places that figuee significantly in all thece types of markets. Once the finkage, flow, and frietion studies have been completed, their results should be represented on maps as well as in other forms to the extent possible, Intrarcgioual Linkages nd Flows = 143 ‘Sample Leading, Questions to Help Guide Intrarcgional Interaction Investigations Wat we he repo export scaly nd pay vy seperate ad copes gmt ee jr eas a proochn wo poe = adie sol pon af ow ty show we gos ve sods wanted among the oa ough a mechan, ih ha ergs tal Soon sete cn rh ant nt sso sere st eda ec mesa ae exchanges depead? ae Wate ts jr tenth ed con tod ot eet fr babes sede, vce ed arp cane 2 te jor crs susie tn ct Sod there esenng uta Lev evel 3: Lal & What ae ena ipa epseing gia ca Aneto pdt pcs ha ee ect secon lon sele o Wane eaios vent Hw andy stom ae gad ttre ance tae pis ‘hough wit wechasne wih wat Blows el Graken ide sp cone eed een income ad explopnent) Level 2 "Bois of exchange within the | Ll 3 Iotermedine Tinpore ‘eres stems tod ofc amie mechonans oo tse charge pent lee 4 Won ie de major botdenecs ad et element or be eye sod sce, tereee aod at » _ air pois of exchange, what Se He er factors nstaining coining Mains se te thence of cheaper source of spel? a ‘change wikis he region? mee So | a Fe nd eg on ne changes depend eve Wha ae ther botenchs and cot element fr be bers tnd sellers, beteen and a! major piss of Onnge: aad ohn ne or lang eo iin hit EXTENDED COMMODITY TRAD Ss ‘The leading questions approach discussed above points the way to priority types of interactions among subunits of the region thet should be in There is an alternative approach ths commodity trade systems analysis, regions with economies dominated ‘elated rural activites tke fish stigated. at differs subtly yet significantly: extended ‘This approach is particularly well suited ty by houschold agricultural production and and the manufacture of went prextacts feosHE + Intearegional Analysis tocat forest resources. Extended commodity trade systems analysis is based on, the secumption that within major existing extended commodity trade systems te the critical Tinkages, flows, and friction factors that enn be encouraged oF avereame so as to increase eegional multipliers, and perhaps returns from exports as wth tended commodity tede systems analysis 6oes not aint at identifying general typeof intearegional linkages. and interactions that shoukd be investigated, Rather, it is a method of intrarcgional analysis that involves documenting. and analyzing specific intraregional extended commodity trade systems, defined in Terms of their linkages, flows, and the factors impinging upon them. That is, Cinder this method, intraregional linkages and fiows are examined only in the suntext of and in relationship to specific extended commodity trade systems, "An cutended commodity trade system, 26 the term is used here, lees to a concept that is somewhat different from that represented by the term comunodiny snurkeving system, which is used by agricultural marketing specialists, and with ‘thick it is sometimes confused. Te latter encompasses the flows and functions From producer (most often a farm houschold) 10 final consumer in the garketing Chain for a particular agricultural commodity. An extended commenity trade Ssutemn covers the same flows and functions, Bul for the most part examines the wravketing chain only a8 far a8 the Gest tsnsaetion that takes place beyond the orders of the region. And in addition so the marketing of a conmmedity, an txtenfed commedity trade system covers input supply and uses of net income Tinked to production and sale of the commodity (Renee, “extended”"). There are fionr basie steps in the analysis of extended commodity trade systems 1. Solecting key commodities. Typically. extended commodity (rade systems sre explored for three 10 six key agricultural of other rural commesities in the repo, Generaly, key nieane these are the commodities from which the largew tavounas of direct gegional income are camel. A conmadiny nay 62 an individual cemnmalty or a geaup of closely related commnetites grown and marketed by the sume people in the sare sway (such as Beans and mtsize i some cases) tit fuly gether eonstitvle @ major source of income, ‘Analysts inay choose 10 designate a commodity as key for reasens oer thin the walame of direct income it generates in the region. For example, they may tesipnate a8 key a commodity that predominates in a subunit of the gion that ‘ran! not be represented in trade system analyses for the other key commodities. ‘hren. a commodity may be designated key that is not now a major income earner inthe region, but that has significant growth poteatiat: this would ead 10 eX vrsinatfon of the Finkages and flows that will have to expand aad possibly become aes efficient for the potential growth to be ccalized. Most offen. key com tbe designated on the basis of commion knowledge about the region's ronan. information already gathered (or the basic statistical compendinm, Sraar published information Irom govsraqent statistical bureaus, extension services, marketing boards, cooperatives, and the Tike » Petermining the essential outlines of the extended trade systems ofthe Key snlities €9 Intraregional Linkages and Flows > 145 commodities. AS suggested ex ree Principal components jam extended! commodity trade system has ave commadiy matting chin athe eon Gtng bling. eis, sn wees and other marketing-related functions): = eens : ive marketing chains in the region for inputs 10 production and marketing of ‘commodity; and meer at menicing of te _seghnal pattems of expenditure from nt income sociated with prong ant Sting the comma (Pee wold be expends imal fr conse Sods and revs, cuding daly Nucl rn, pbli eve, and comer able In this step, through discussions with appropriate people (farmers, traders teinsporters, extension workers, and so on), the basic outlines of the principal teaing chains and significant secondary ehains in each of the three coniponents jge determined for each of the extended commodity trade systems. ‘The most important aspects of the basie outlines of trading chains determined inthis step ste; . te mir mason gn ine chant —heatins whee sient sou cxchnge (ot commas: pts and usu on he ere . eee ere flowing between and through these locations in a typical year, and : ae obvious judgement needs o be exercised n uring the appt ve of ian fer he bs outline of heaving eas, Forenample er pes, ey cant be take (othe eel of indi X al Tarm houschoids. 364 probably tol to the level of individual villages, either. In terms of ows of goods, only major inputs and consumer goods eategories can be considered. ‘A special word is in order concerning tracing the ouaitines of ing chains for consumer goods, The consumer gooxs trading chains tobe teacet in principal represent regional patterns of expenditure from net income associate! with pro. ducing and marketing each of the key cormmodities, Quite commonly, consumer pads purchases are made from a general post of kauschaldl income, and cannot be associated with farm net income from one commodity or another. If this is ihe case in the study region, then conser goods can be treated separately and senerally, and aced not be Tinked to individual extended commodiy trade sys lems. In this ease consumer goods might be categorized as fond. personal items pessomal services, public services, and consumer durable of theie principal tad and the basic outlines chains in the fexion determined But itis importans what niicant trading chains for major types of consumer ‘apenditures be accounted for, because studies have shown that it is often in consumer goods (rade that the larger ptt of regions ingoye ymultiplies nn takes146 + Intraregional Analysis place. For this reason, 100, itis important to determine if net reventies from ccstain kinds of farm commodities do in fact tend to be used for certain kinds ff consumer purchases, and if soto link them to the extended commodity tre systems with which they Forexample, in many countries women ae traditionally responsile for certain cerofs and have control as well over the uses of net income from those crops, Frequcnily, expenditures by women have a higher regional income multiplication effect than expendituces by men because women tend to concentrate their ex. ppenditures more on food and small household goods and services made locally. ‘As a result, the act income from the crops for which they are responsible will Ihave the potential (o generate more overall regional income; and the efficiency ff the Jinks in the trading chains for the types of goods they buy may have freater significance than others. ‘As another example, payment for certain types of farm commodities tend to bho made i a small number of large payments over the course of a year, while payment for others is received in sm lar increments, Often, so-called Iumpy™ receipts ate used for lumpy expenses like school fees and consumer durables, which may have low regions! income mliplication effects. Hence, iL is important to determine whether significant linkages exist between types of commodities and types of consumer expenditures, and to West consuinee ex associated. penditures in the manner most appropriate In any case, when the basic outlines of the several extended commonly trade systems have been determined, and if possible, mapped, an interesting—and convenient—finding is almost certain to be observed by the analyst. It is likely fo be foxind that to a significant degr Cf the same institutions and categories of proviacers ani! traders, figure prom rently in many. if aot all, the extended commodity trade systems. This vastly Simplifies the job of data collection and analysis, 3, Documenting the extended trade systems. On the basis of the trating chai ‘outlines developed in the second step, the links 10 be documented are selected smd studlied, The links are the tadify chain segments between and ineludin Transaction points. Surveys, public and private reeards, interviews, oud! counts he same Ioeations and routes, and many and other devices ean be used for this purpose. The documentation should cencomipass as many of the categories of linkages shown in Figure 12.1 as possible axl appropriate, The aim isto establish, for each important fink, how it functions iw: terms of volumes and values of flows, people and institutions involved, capacity of infrastructure and capital eqeipment, administrative systems, and tnajor frietion factors and inefficiencies: and also, why it functions ait does Hecause s0 many of the locations, routes, and other elements of the extended commodity trade systems will be shared, most of the data for all the systems can be gathered at the same places 4, Representing and analyzing the trude systems in terms of linkages, flows. cand inhibiting fuctors. Onee the data are collected they are reordered and pre cessed into descriptive analyses of the extended commerity trade systems (re- Intraregional Linkages and Flows + 147 fed 1 8 horizontal nays. Agin tothe eaten posible, the systems should te documented on mapas well in ier fons, Fal he dats ne moe again oto desrpive anayees of individual links (fered fost vente ae ys). These inks ae decribed in tes ofthe pnp kage, les, bor leneks, and insfcenies that chrctrze them: and i ten ot the implications of thes forthe operation ofeach entnded com “he reason for fst ordering ted sxIdlc (vinta arly) ts Be imodity trade system, modity trade systems able to detect the ramifications of the quality of ‘one link on the performance of other pats of each system. This, in tum, provides important input to the vertical analysis. Indeed, at this last point in the analysi of extended commodity trade systems, observed clase inierdependencies among, adjoining discrete links may make it appropriate to consolidate some of them into larger linkage segments for further analytical and planning consideration Chapter 13 contains additional discussion regarding extended commodity trade systems analysis, There the emphasis is on ways of analyzing the data for in into region al income multiplication associated with the performance of spec z f specif inks in trading chains as expressed through sn events at the transaction points that