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Economic Development Essay

2570 words - 11 pages

ContentINTRODUCTION: 1THE ROLE OF GEOGRAPHY IN ECONOMIC DEVELOPMENT 1WHAT DOES THE DISTANCE MATTER? 3WHAT DETERMINES DISTANCE COSTS AND HOW DOES ICT RESHAPE THEM? 4WHAT ARE THE LIMITATIONS OF ICT'S EFFECT ON DISTANCE? 6CONCLUSION 9REFERENCES AND BIBLIOGRAPHY 10Introduction:New communications and information technologies (ICT) have made the communication in long distance more and more convenient and cheap. It seems that the developing countries would benefit sufficiently from the decreasing costs of establishing communications networks, which could results in "the prospect of better provision of education, health care, and host of other services" (Anthony J. Venables, 2001). Based on that, ...view middle of the document...

To identify the reason, there are usually two seemingly contradictory approaches. One approach emphasizes the role of inherent features of the landscape in shaping development patterns, which explains differences in economic development between locations by the physical characteristics of the location. The other approach argues that even in the absence of physical differences between locations, some locations are in the 'core' and others are in the periphery, which stresses on how the tension between "centripetal" and "centrifugal" forces.According to Paul Krugman (1998), "centripetal" forces, such as forward and backward linkages in production and increasing returns in transportation, are to promote concentration. The "centrifugal" forces, such as factor immobility and land rents, are to promote dispersal because it can "produce a process of self-organization, in which more or less symmetric locations can end up playing very different economic roles."As a result of impact of centripetal factors, some highly developed economic region have been established. Businesses in those regions would enjoy the advantages of large market, which promote the lager-scale production and lower cost of intermediate goods, also the benefits of specialized skilled employee supply and "information spillovers"(Paul Krugman, 1998). There were significant social and economic advantages in being located close to those "core" regions, which are usually some super cities such as New York. The physical fabric that makes up a city - blocks of land, buildings, streets, commercial areas, neighbourhood - all contribute to the physical flow of goods and people. Urbanisation has been encouraged by the need to overcome (or save) time through minimising space. Cities have developed to make communication easier, to reduce the "friction" of distance and physical space. In older cities it can be seen that by gathering as many of the necessities of life into a small area - home, work, marketplaces, government offices etc. - time constraints are overcome by minimising distance constraints.The "core" region is the places where the economic activities happened much densely, which would definitely boasts the economy development of the business or countries within that region. On the contrary, those regions that are distant from the "core" would suffer the relatively slow development because of being lack of economic resources, including nature resources and high quality human resources. Those countries in the "peripheral" region have to rely on the technology and information dispersed from the developed countries and advanced business. The distance mainly causes the large inequity of development between the core regions and peripheral regions.What does the distance matter?1. Economic interactions fall off with distanceThe standard framework for quantifying the effect of distance on economic interactions is the gravity model, which relates interactions between a pair of countries to their...

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