The concept of somehow diversifying the industrial structure of a region in the interest of stabilizing regional employment, income, or other returns from economic activity has been a venerable component of the regional economics literature since the very earliest recognition that subnational regions possessed definable economies meriting separate attention. Detailed analysis of diversification policy has been hindered by problems of defining regional diversification in theoretically meaningful ways and of then measuring relative diversification. The potential returns from diversification efforts have also been minimized by the approach found in Thompson (and echoed in Richardson [6, p. 2761 and elsewhere) which suggests that "all urban areas cannot possess the relatively few stable industries" and that "industrial diversification leads toward a cycle pattern approximating that of the national economy" [9, p. 1481.In separate papers [2, 31 I have presented an approach to regional industrial diversification which offers a new and, to some extent, improved conceptual approach t o the topic, and I have reported some evidence that this new approach provides a measure of relative industrial diversification which reduces the unexplained variation in historical indices of regional instability for a set of 52 U.S. metropolitan regions considerably more than previously postulated measures. In this paper I consider the problem of choosing an optimally diversifying increment to regional industrial structures. Three alternative approaches or strategies for choosing such increments are explored, first theoretically and then in terms of their significance for three U.S. cities which have had histories of instability greater than average for comparable cities. It will be shown that in general those industries which are nationally most stable will be the optimal diversifying increments only under very limited conditions. Section 1 contains a summary of the basic approach. Section 2 contains an extension of it to the specific problem oi choosing increments to a given industrial structure, and Section 3 provides an empirical analysis which compares and contrasts the alternative strategies in terms of their policy implications for three cities.
There is emerging evidence that globalization is beginning to provide new opportunities for global coalitions of advocacy groups to bring market-based pressures to bear upon major transnational firms in a way that promotes higher standards of social and environmental responsibility in production processes and trade relations. This can be seen as successful citizen-led attention to the "production and process methods" which the Uruguay Round of trade negotiations explicitly chose to omit. More broadly it may reflect the increased importance of global branding, improved awareness in both consumer and financial markets of the social and environmental practices of firms, and collaboration on the part of producers to reduce their risk of brand-damaging attacks on the social and environmental responsibility of their practices. The emergence and growth of the Forest Stewardship Council as the "gold standard" for sustainable forest management, and the expensive attempts by the forest products industry to create industry-driven substitute standards, may be the pivotal example of this phenomenon. The further growth of certified Fair Trade practices under Transfair USA is another example. Both cases provide important lessons as to the elements of present and future success for this movement. They may also represent creative new solutions for problems of persistent poverty by using the leverage of markets in the global North to improve the ability of workers, farmers, and other producers in the global South to build natural assets in ways that generate socially and environmentally sustainable livelihoods.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Center for Latin American Studies at the University of Miami is collaborating with JSTOR to digitize, preserve and extend access to Journal of Interamerican Studies and World Affairs. INTRODUCTION: THE RUSH TO JUDGMENT ON NAFTAISTORY WILL record the almost-frenzied pace with which negotiators from Mexico, the United States, and Canada have proceeded to draft a treaty that will change drastically the nature of economic relations among the three nations. Three nations with severe social and economic problems, declining competitiveness in the global economy, and virtually no plans for remedying their domestic shortcomings have rushed to drop their borders. Ironically, this act will further reduce their ability to provide domestic remedies for their current problems. It casts these three economies into the unpredictable winds of free trade precisely at a time when a truly-conservative policy would have dictated economic reform at home and efforts to resolve, first, the major domestic crises in each.1The most careful and articulate supporters of the proposed free trade agreement base their arguments in the abstract Michael E. INTRODUCTION:THE RUSH TO JUDGMENT ON NAFTA ISTORY WILL record the almost-frenzied pace with which negotiators from Mexico, the United States, and Canada have proceeded to draft a treaty that will change drastically the nature of economic relations among the three nations. Three nations with severe social and economic problems, declining competitiveness in the global economy, and virtually no plans for remedying their domestic shortcomings have rushed to drop their borders. Ironically, this act will further reduce their ability to provide domestic remedies for their current problems. It casts these three economies into the unpredictable winds of free trade precisely at a time when a truly-conservative policy would have dictated economic reform at home and efforts to resolve, first, the major domestic crises in each.1The most careful and articulate supporters of the proposed free trade agreement base their arguments in the abstract Michael E. INTRODUCTION: THE RUSH TO JUDGMENT ON NAFTA ISTORY WILL record the almost-frenzied pace with which negotiators from Mexico, the United States, and Canada have proceeded to draft a treaty that will change drastically the nature of economic relations among the three nations. Three nations with severe social and economic problems, declining competitiveness in the global economy, and virtually no plans for remedying their domestic shortcomings have rushed to drop their borders. Ironically, this act will further reduce their ability to provide domestic remedies for their current problems. It casts these three economies into the unp...
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