Regional growth and resource constraints

Theories of regional growth can be conveniently grouped into two categories. In the first group the growth of demand for a region’s output, particularly the growth of exports, is regarded as the essential determinant of regional growth. This role is assumed by the growth of inputs required for the production of goods and services in the second group of theories. While we shall discuss both groups of theories in section 1.2 it is important to point out at the outset that natural resources and the limitations of these resources should play an important role in both groups of theories, even though this role is not typically discussed in the literature. The neglect of natural resources and the limitations they impose on regional growth and on the growth alternatives available to a region common to all models advanced in the literature arises from the underlying assumption that natural resources are inexhaustible. If natural resources required for the production of a particular output are available in unlimited quantities, or if the nature of the production process is such that the limited supply of these resources is not destroyed in the process so that they may be reused perpetually, both groups of models would be justified in their neglect of the limitation to regional growth imposed by such resources.