"The so-called free market approach of the South has been recommended as a development model for other developing regions and countries," says Dr. Amy K. Glasmeier, professor of geography and the John D. Whisman Appalachian Regional Scholar. "However, government policies in the South -- particularly infrastructure investments and trade protection -- played a key role in the South's transformation."
This transformation began after World War I and reached its peak in the late 1970s. The conversion from rural farm to rural industrialized society was not without its consequences and was certainly not achieved in a laissez-faire, free-market climate.
The South embraced certain aspects of the New Deal programs of the 1930s, particularly infrastructure, but explicitly rejected the social aims. The combination of roads, military installations, trade protection and the large influence of the Tennessee Valley Authority helped to bring the South near to the economic level of the rest of the country.
"One agency, the Appalachian Regional Commission, has spent $5 billion on roads since the 1960s," says Glasmeier.
In the course of industrializing the economy, the social structure remained backwards.
"Developing areas need to make significant decisions and choices," Glasmeier told attendees today (Feb 14) at the annual meeting of the American Association for the Advancement of Science in Seattle. "The approach must be deliberate. Governments can't just pour money into regional economies and expect beneficial results to filter down to those who need it."
Using the example of the South, it seems clear that strong, stable, national macroeconomic policies are necessary for successful regional policies, says Glasmeier.
All areas cannot be treated identically. Natural and human resources must be considered when deciding where the federal government can improve the situation and where it cannot.
The overall statistics for the South imply that the South's convergence on national economic norms has benefitted all the region's residents. However, inequitable social conditions, especially in respect to rural minorities, means that high levels of inequality have persisted over time.
According to Glasmeier, poverty rates for Black/African Americans in the South are three times those for Whites, the South continues to spend less per pupil on public education than other U.S. regions, and the share of Black southerners completing less than a high school education appears to have increased relative to the national average.
The South spurred development with the lure of very low wages, unlimited supplies of unskilled labor, low taxes and virtually no business regulation. These same lures became local millstones. Businesses expecting low tax structures balked at increased taxes for education. Unskilled, low wage workers are not prepared to meet the demands of today's global market.
"Major efforts to enhance the human capital component of the region are increasing," says Glasmeier. "But, changing the quality of the skills in a region is a long-run process that takes considerable resources, commitment and, most of all, patience."
One consequence of investing in human capital is that the most qualified people will leave for better jobs. In the rural South, this out migration was to Northern cities.
"Only after substantial investment was made in the region's physical assets did skilled workers return to the area," says Glasmeier. "If you build a road from Merida to Mexico City, you must be certain that the people in Merida can benefit from the opening of the road. If they are educated and highly skilled, rural people will move to Mexico City for higher wages."
The Penn State researcher suggests that any development policy must consider a region's resources. She warns that programs on a national level probably will not be sensitive to local particularities.
Once the myth of regional development without an infusion of federal money, expertise and preferentiality is laid to rest, developing areas can learn much from the commercialization of the rural South and from the mistakes that were made.
EDITOR: Dr. Glasmeier can be reached at (814) 865-7323 or akg1@ems.psu.edu on the Internet.
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