Jun 08 2009

Jane walks into a bar

by at 7:34 pm under Uncategorized

Haha, I feel like I’m working at Steiglitz’ version of the World Bank — I’m tasked with applying development theories to a poor country without knowing more than statistics and summaries about the place. I am Greif’s nightmare. It’s a good thing that my experiment just involves a hypothetical blog entry rather than millions of dollars in development funds and thousands of people’s livelihoods. Since I’m not an expert in developing nations, I’m going to twist this assignment a bit to fit a stagnant area in the world that I am familiar with: western Pennsylvania.

Greif might be stumped by this one. It’s an area with well-established coercion constraining mechanisms and market infrastructure. The city itself is experiencing growth – new corporate offices downtown, new restaurants and shops in all of the neighborhoods. However, the surrounding areas have been stuck with slow or non-existent growth. It’s like western PA has reached a point in the evolution of its markets that Greif’s theories don’t really apply to. Jacobs might have an easier time talking about Pittsburgh and its surrounding areas. She’d probably say that the Pittsburgh area needs to examine its imports and begin to replace them with locally-produced goods.

Like many areas in America, western PA imports almost everything. There are a few things that the area can focus on in particular though. Jacobs’ theory is that by keeping the buying and spending local, the area enters into virtuous circles and more wealth stays near to everyone’s benefit. Tourism is a good example. Almost everyone heads to the Outer Banks, NC or Ocean City, MD in the summer. There are plenty of lakes in the mountains surrounding Pittsburgh that could be just as nice as beach resorts with a little attention and care. The buying of local vegetables and farm goods seems to be on the rise too. More buying from local farmers means more local tax revenue and more local spending by the farmers themselves.

What can all of this teach us about the economic crisis in America today? Greif might suggest that the market for complex derivative products evolved with an institution of uncertainty of the products and trust in technology, all with coercion from senior executives to go through with the deals. His theories provide a clean framework for us to analyze the past, but I have trouble seeing how they apply to the future. Jacobs, on the other hand, might be more useful for looking at the future rather than the past. She’d say that the stimulus package needs to be distributed, managed, and measured according to cities and their regions rather than states or directly to individuals. She’d also say that those spending the stimulus money need to sit down and get familiar with the situations of the citizens – like shooting the bull at a local pub for a while.

No responses yet | Categories: Uncategorized

Comments RSS

Leave a Reply

You must be logged in to post a comment.