Website Staf Akademik Universitas Gadjah Mada
 

Regional Economics

Descriptive:

The most striking features of the geography of economic activity is concentration and unevenness. Spatial concentration of economic activities within a country indicates that industrialisation constitutes a geographically selective process. In many developing countries, the uneven spatial distribution of both industry and population gathers around capital cities such as Bangkok, New Delhi, Mexico City, Sao Paulo, and Jakarta, which engender a spatial system based on the accumulation of capital and labour in urban agglomerations.

A growing awareness of the limited explanations offered by the traditional location theory to analyse industrial and regional development has led to the surge of new economic geography, or geographical economics. Recently a growing number of economists have become interested in the study of location problems, which triggered the development of new tools which have made an interesting contribution to regional economics.

This subject will examine and discuss: (a) both major traditional and regional theories; (2) to what extent those theories can be used to explain urban growth, backwardness, and regional development with special reference to Indonesia.

Objectives:

The aim of the course is to acquaint students with main principles, theories, issues, and methods of analyzing and developing regions. The ongoing process of manufacturing export expansion and industrial transformation is an excellent laboratory for studying the pattern and changing structure of industry, clusters, and cities. The course will explore various studies on industrial clusters, which is inspired by the success of Italian, American, European, Japanese, and Brazilian clusters. Case studies on Indonesia have largely emphasised on agglomeration economies, industrial location, and urban development of metropolitan regions.

 

Topics

Lecture

Topic

Content

References

1

Introduction to regional economics

  • Regional economics: what, why, and how

Krugman (1991); Kuncoro (2002: ch. 1)

2

Regional development

  • New laws on Local Government
  • Methods of Interregional and Regional Analysis
  • Unit of analysis

Armida & Brodjonegoro (2005: ch. 3);

Kuncoro (2004: ch. 1); Isard et al. (1998: ch. 1-2)

3

Financing regions
  • How to finance regional development
  • Local owned revenue vs central government transfers

Armida & Brodjonegoro (2005: ch. 7);

Kuncoro (2004: ch. 2)

4

Spatial Inequality
  • Growth vs inequality
  • Williamson and Entropy Theil Index

Armida & Brodjonegoro (2005: ch. 14, 15);

Kuncoro (2002: ch. 4; 2004: ch. 7)

5

Structural transformation
  • How to measure structural transformation
  • Spatial aspect of poverty: A New Institutional Economics Perspective

Armida & Brodjonegoro (2005: ch. 11, 12);

Kuncoro (2004: ch. 5,8)

6

Leading Sector

  • Identifying leading sector: Location Quotient, Krugman’s specialization index
  • Regulation and regional minimum wages

Isard, et al (1998: ch. 2); (Armida & Brodjonegoro (2005: ch. 10)

Kuncoro (2002: ch. 5; 2004: ch. 9); Martin & Sunley (1996)

7

Economic Geography and GIS (Geographic Information System)
  • Introduction to GIS
  • Economic Geography: Old vs new
  • Urban bias
  • Geographic Targeting In Indonesia

Armida & Brodjonegoro (2005: ch. 13);

Kuncoro (2002: ch. 3); Moowaw (1996); Puga (1998)

8

Foreign Direct Investment (FDI) and its Impacts to regional development
  • Forms of FDI
  • Impacts on regions

Armida & Brodjonegoro (2005: ch. 5);

Kuncoro (2002: ch. 5); Sjoholm (1999)

9

Industrial clusters
  • Theories of industrial district
  • The role of cluster to boost regional competitiveness
  • Case studies on clusters

Armida & Brodjonegoro (2005: ch. 6);

Kuncoro (2002: ch. 2, 7); Porter (1998a); Weijland (1999); Sato (2000)

10

Banking and Industrial desentralisation
  • Industrial sentralisation in Indonesia
  • Banking desentralisation in Indonesia

Armida & Brodjonegoro (2005: ch. 8);

Henderson & Kuncoro (1996); Kuncoro (2002: ch. 4)

11

Unsustainable development
  • Sustainable vs unsustainable development
  • Ecodevelopment
  • Clean River Program (e.g. Ciliwung, Code)
  • Disaster management (how to mitigate tsunami, erathquake, flooding)

Armida & Brodjonegoro (2005: ch. 16, 18);

Dick & Rimmer (1998); Kuncoro (2002: ch. 6)

12

Mega cities and interregional analysis
  • The emergence of mega cities
  • Monocentric vs network cities
  • Spatial plans: industrial, bonded zone, KAPET, Free Trade Zone

Isard, et al. (1998: ch. 3-4); Atkinson (1993); Wongsuphasawat (1997); Kuncoro (2004: 11-12)

13

Governance and multilevel corruption
  • Good vs bad governance
  • How to cope with multilevel corruption?
  • Bureaucratic reforms

Armida & Brodjonegoro (2005: ch. 2,4);

Kuncoro (2002: ch. 7; 2004)

14

Regional and place marketing
  • Selling cities and regions
  • How to attract investment and tourists?

Kuncoro (2004: ch. 14-16)

 

Learning Outcome

Having taken this course, the students should have the following competence:

· They can analyse regional development, including growth, inequality, structural transformation.

· They will master various methods to analysis urban areas, regions, and industries.

· They may identify leading sectors, develop zones, and regional aspects of banking and industry.

· They can understand some obstacles of sustainable regional development and major emergence issues (corruption, governance, marketing places).

Evaluation

No.

Components

Score

1

Midterm exams

35%

2

Finalterm exams

35%

3

Group Presentation and paper

20%

4

Discussion

10%

References

Suggested Books:

  1. Alisjahbana, Armida S. & Brodjonegoro, Bambang PS. (2004). Regional Development in The Era of Decentralization: Growth, Poverty, and the Environment. Universitas Padjadjaran, Bandung.
  2. Isard, Walter, Iwan Jaya Aziz, Matthew P.Drennan, Ronald E. Miller, Sidney Saltzman, Erik Thorbecke. (1998) Method of Interregional and Regional Analysis, Ashgate, Aldershot.
  3. Krugman, P. (1991). Geography and Trade. Cambridge: MIT Press.
  4. Kuncoro, M. (2004). Otonomi & Pembangunan Daerah: Reformasi, Perencanaan, Strategi, dan Peluang. Penerbit Erlangga, Jakarta.
  5. Kuncoro, M. (2002). Analisis Spasial dan Regional: Studi Aglomerasi dan Kluster Industri Indonesia. Yogyakarta: UPP-AMP YKPN.

Suggested Journals:

  1. Atkinson, A. (1993). Are Third World Megacities Sustainable? Jabotabek as An Example. Journal of International Development, 5(6), 605-622.
  2. Dick, H. W., & Rimmer, P. J. (1998). Beyond the Third World City: The New Urban Geography of South-East Asia. Urban Studies, 35(12), 2303-2321.
  3. Hanson, G. H. (1998). Regional Adjustment to trade Liberalization. Regional Science and Urban Economics, 28, 419-44.
  4. Henderson, J. V., & Kuncoro, A. (1996). Industrial Centralization in Indonesia. The World Bank Economic Review, 10(3), 513-40.
  5. Kim, S. (1999). Regions, Resources, and Economic Geography: Sources of U.S. Regional Comparative Advantage, 1880-1987. Regional Science and Urban Economics, 29, 1-32.
  6. Markusen, A. (1996). Sticky places in slippery space: A typology of industrial districts. Economic Geography, 72(3), 293-.
  7. Martin, R., & Sunley, P. (1996). Paul Krugman’s geographical economics and its implications for regional development theory: A critical assessment. Economic Geography, 72(3), 259-.
  8. Moowaw, R. M. (1996). Urbanization and Economic Development: A Bias towards Large Cities. Journal of Urban Economics, 40, 13-37.
  9. Ottaviano, G. L. P., & Puga, D. (1998). Agglomeration in the Global Economy: A Survey of the ‘New Economic Geography’. The World Economy, 21(6), 707-32.
  10. Porter, M. E. (1998a). Clusters and the New Economics of Competition. Harvard Business Review, November-December(6), 77-91.
  11. Porter, M. E. (1998b). Competing Across Locations: Enhancing Competitive Advantage through a Global Strategy. In M. E. Porter (Ed.), On Competition (pp. 309-48). Boston: Harvard Business School Publishing.
  12. Puga, D. (1998). Urbanization Patterns: European versus Less Developed Countries. Journal of Regional Science, 38(2), 231-252.
  13. Sato, Y. (2000). Linkage formation by small firms: the case of a rural cluster in Indonesia. Bulletin of Indonesian Economic Studies, 36(1), 137-166.
  14. Sjoholm, F. (1999). Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Investment. Economic Development and Cultural Change, 47(3), 559-584.
  15. Weijland, H. (1999). Microenterprise Clusters in Rural Indonesia: Industrial Seedbed and Policy Target. World Development, 27(9), 1515-30.
  16. Wongsuphasawat, L. (1997). The Extended Bangkok Metropolitan Region and Uneven Industrial Development in Thailand. In C. Dixon & D. W. Smith (Eds.), Uneven Development in South East Asia (pp. 196-219). Aldershot: Ashgate.

Suggested Web-Sites:

  • Mudrajad Kuncoro http://mudrajad.com
  • Bank Indonesia, htttp://www.bi.go.id
  • Badan Pusat Statistik, htttp://www.bps.go.id
  • Kawasan Pengembangan Ekonomi terpadu, htttp://www.kapet.org
  • IMD World Competitiveness Yearbook, http://www02.imd.ch/wcy/

Download File Kuliah:

  1. LECTURE 1 REGIONAL RESOURCE ECONOMICS