UNIVERSITY OF NAIROBI COLLEGE OF HUMANITIES AND SOCIAL SCIENCES FACULTY OF ARTS & SCHOOL OF PHYSICAL SCIENCES Department of Geography and Environmental Studies TEACHING MODULE CGP/SGP 321: ECONOMIC GEOGRAPHY WRITTEN BY Prof. Evaristus Irandu Department of Geography and Environmental Studies EDITED AND REVIEWED BY... Department of Geography and Environmental Studies 1
Published by the Centre for Open and Distance Learning (CODL) University of Nairobi-Kenya 2012 2
Contents INTRODUCTION TO THE UNIT... Error! Bookmark not defined. LECTURE 1: NATURE AND SCOPE OF ECONOMIC GEOGRAPHY... 11 1.0 INTRODUCTION... 11 1.1 OBJECTIVES... 11 1.2 THE NATURE OF ECONOMIC GEOGRAPHY... 11 1.2.1 What is Human Geography?... 12 1.2.2 Definition of Economic Geography... 12 1.3 SCOPE OF ECONOMIC GEOGRAPHY... 14 1.3.1 The Temporal Aspect/Scope... 14 1.3.2 The Spatial Aspect/Scope... 15 1.3.3 The Vertical scope... 15 1.3.4 The Continental Scope... 15 1.3.5 The Global Scope... 15 1.3.6 The Applicability Scope... 16 1.3.7 The Theoretical Scope... 16 1.4 HISTORICAL AND PHILOSOPHICAL DEVELOPMENT OF ECONOMIC GEOGRAPHY... 17 1.5 SUMMARY... 20 1.6 REFERENCES... 21 LECTURE 2: THEORIES, MODELS AND APPROACHES IN ECONOMIC GEOGRAPHY... 22 2.0 INTRODUCTION... 22 2.1 OBJECTIVES... 22 2.2 KEY CONCEPTS IN ECONOMIC GEOGRAPHY... 22 2.3 THEORIES IN ECONOMIC GEOGRAPHY... 26 2.3.1 Hypothesis... 26 2.3.2 Models (Model Building)... 27 2.4 APPROACHES IN ECONOMIC GEOGRAPHY... 28 2.4. 1 Deductive Model/Approach... 28 2.4.2 Inductive Approach... 29 2.5 SUMMARY... 29 2.6 REFERENCES... 30 LECTURE 3: CHANGING PERSPECTIVES IN ECONOMIC GEOGRAPHY... 31 3.0 INTRODUCTION... 31 3.1 OBJECTIVES... 31 3.2 MAJOR THEORETICAL PERSPECTIVES IN ECONOMIC GEOGRAPHY... 32 3.3 LOCATON THEORY AND NEOCLASSICAL APPROACH... 34 3.4 BEHAVIOURAL APPROACH... 36 3.5 STRUCTURALIST APPROACH/MARXIST POLITICAL ECONOMY... 36 3.6 POST-STRUCTURALIST APPROACH/NEW ECONOMIC GEOGRAPHY... 38 3.7 SUMMARY... Error! Bookmark not defined. 3.8 REFERENCES... 41 LECTURE 4: MEASURING LEVELS OF DEVELOPMENT... 42 4.0 INTRODUCTION... 42 4.1 OBJECTIVES... 42 4.2 DISTINGUISHING BETWEEN GROWTH AND DEVELOPMENT... 42 3
4.3 CONCEPT OF SUSTAINABLE DEVELOPMENT... 43 4.4 ECONOMIC INDICATORS OF DEVELOPMENT... 45 4.5 SOCIAL INDICATORS OF DEVELOPMENT... 49 4.6 HUMAN DEVELOPMENT INDICATORS... 51 4.7 SUMMARY... 54 4.8 REFERENCES... 55 LECTURE 5: THEORIES OF GROWTH AND DEVELOPMENT... 56 5.0 INTRODUCTION... 56 5.1 OBJECTIVES... 56 5.3 THEORIES OF UNDERDEVELOPMENT... 61 5.3.1 Underdevelopment as a State... 61 5.3.2 Underdevelopment as a Process... 64 5.4 SUMMARY... 68 5.5 REFERENCES... 69 LECTURE 6: GLOBALISATION AND ECONOMIC DEVELOPMENT... 70 6.0 INTRODUCTION... 70 6.1 OBJECTIVES... 70 6.2 THE CONCEPT OF GLOBALISATION... 71 6.3 EVOLUTION OF GLOBALISING WORLD... 71 6.4 BENEFITS OF GLOBALISATION... 73 6.5 NEGATIVE ASPECTS OF GLOBALISATION... 74 6.6: GLOBALISATION AND TRANSNATIONAL CORPORATIONS... 75 6.6.1: INTRODUCTION... 75 6.6.2 OBJECTIVES... 76 6.6.3 EMERGENCE OF TRANSNATIONAL CORPORATIONS (TNCs)... 76 6.6.4 FOREIGN DIRECT INVESTMENTS (FDI)... 78 6.6.5 TNCs AND GLOBALISATION... 83 6.6.6 TNCs AND HOME ECONOMIES... 85 6.6.7 TNCs AND HOST ECONOMIES... 85 6.7 SUMMARY... 87 6.8 REFERENCES... 88 LECTURE 7: AGRICULTURE AND FOOD PRODUCTION... 89 7.0 INTRODUCTION... 89 7.1 OBJECTIVES... 89 7.2. AGRICULTURE FROM THE VIEW POINT OF GEOGRAPHY OF DEVELOPMENT... 90 7.2.1 DEFINITION OF AGRICULTURE... 90 7.2.2 APPROACHES TO THE STUDY OF AGRICULTURAL GEOGRAPHY... 90 7.2.3 ROLE OF AGRICULTURE IN DEVELOPMENT... 92 7.3 EVOLUTION OF AGRICULTURAL SYSTEMS... 94 7.4 WORLD AGRICULTURAL SYSTEMS... 96 7.4.1 PROBLEMS OF DELIMITATION AND CLASSIFICATION... 97 7.4.2 SUBSISTENCE AGRICULTURE... 99 7.4.3 PLANTATIONS AND AGRIBUSINESS... 100 7.5 VON THUNEN S MODEL OF AGRICULTURAL LOCATION... 102 7.6 SUMMARY... 108 7.7 REFERENCES... 109 LECTURE 8: THE WORLD FOOD PROBLEM... 111 8.0 INTRODUCTION... 111 8.1 OBJECTIVES... 112 4
8.2 THE GROWTH OF FOOD PRODUCTION... 112 8.2.1 TRENDS IN FOOD SUPPLY... 112 8.2.2 FAMINE... 113 8.3 IMPROVING FOOD SUPPLIES... 114 8.3.1 EXPANDING CULTIVATED LAND... 114 8.3.2 IMPROVING FOOD DISTRIBUTION... 115 8.3.3 AGRICULTURAL POLICIES AND LAND REFORMS... 116 IMPROVEMENT APPROACH... 116 TRANSFORMATIONAL APPROACH... 117 LAND REFORMS... 117 8.3.4 AGRICULTURAL TECHNOLOGY AND THE GREEN REVOLUTION... 118 THE GREEN REVOLUTION... 119 8.4 SUMMARY... 122 8.5 REFERENCES... Error! Bookmark not defined. LECTURE 9: INTRODUCTION TO GEOGRAPHY OF INDUSTRIAL PRODUCTION... 123 9.0 INTRODUCTION... 124 9. 1 OBJECTIVES... 124 9.2 DEFINITION OF INDUSTRIAL GEOGRAPHY... 124 9.3 NATURE AND SCOPE OF INDUSTRIAL GEOGRAPHY... 125 9.4 THE CONCEPT OF INDUSTRY... 126 9.5 CLASSIFICATION OF INDUSTRIES... 128 9.5.1 THE INTERNATIONAL STANDARD INDUSTRIAL CLASSIFICATION (ISIC)... 128 9.6 INDUSTRIAL LOCATION FACTORS... 129 9.6.1 PHYSICAL FACTORS... 130 9.6.2 ECONOMIC FACTORS... 131 Scale Economies... 137 9.6.3 HUMAN FACTORS... 137 9.7 INDUSTRIAL LOCATION THEORY: INDUSTRIAL LOCATION SCHOOL OF THOUGHT... 139 9.7.1 THE LEAST COST SCHOOL... 139 CRITICISM OF WEBER S MODEL... 142 9.7.2 THE MARKET AREA SCHOOL... 143 9.7.3 THE MARGINAL LOCATION SCHOOL... 144 9.7.4 THE BEHAVIOURAL SCHOOL... 145 9.8 SUMMARY... 146 9.9 REFERENCES... 146 LECTURE 10: ROLE OF INDUSTRIALIZATION IN DEVELOPMENT... 148 10.0 INTRODUCTION... 148 10.1 OBJECTIVES... 148 10.2 REASONS FOR INDUSTRIALIZATION... 148 10.3 INDUSTRIAL DEVELOPMENT STRATEGIES... 150 10.3.1 IMPORT SUBSTITUTION INDUSTRIALIZATION... 150 10.3.2 EXPORT-ORIENTED INDUSTRIALIZATION (EOI)... 152 10.4 SUMMARY... 154 10.5 REFERENCES... 155 LECTURE 11: GEOGRAPHY OF MONEY... 156 11.0 INTRODUCTION... 157 11.1 OBJECTIVES... 157 5
11.2 DEFINITION OF GEOGRAPHY OF MONEY... 157 11.3 ORIGINS OF MONEY... 159 11.4 PLACE AND THE URBAN SPATIAL DYNAMICS OF FINANCE... 159 11.5 MONEY AND ECONOMIC TRANSFORMATION OF SPACE... 160 11.6 SAVINGS... 160 11.7 MONETARY AND FISCAL POLICIES... 161 11.8 SUMMARY... 164 11.9 REFERENCES... 164 LECTURE 12: TERTIARY SECTOR AND ECONOMIC GEOGRAPHY OF GLOBAL TRADE... 165 12.0 INTRODUCTION... 165 12.1 OBJECTIVES... 165 12.2 FORMAL TERTIARY SECTOR... 166 12.2.1 Definition of Tertiary Sector... 166 12.2.2 Contribution of Tertiary sector to Development... 167 12.3 INFORMAL TERTIARY SECTOR... 169 12.3.1 Definition of Informal Sector... 170 12.3.2 Development of Informal sector... 170 12.3.3 Linkages between the Formal and Informal sectors... 172 12.3.4 Obstacles faced by the Informal sector... 172 12.4 ECONOMIC GEOGRAPHY OF GLOBAL TRADE... 173 12.4.1 BENEFITS OF TRADE... 173 12.4.2 ETHICAL TRADE... 174 12.4.3 INTERNATIONAL TRADE THEORY... 177 12.5 SUMMARY... 180 12.6 REFERENCES... 181 LECTURE 13: GENDER AND DEVELOPMENT... 182 13.0 INTRODUCTION... 182 13.1 OBJECTIVES... 183 13.2 DEFINITION OF CONCEPTS AND TERMS... 183 13.3 GENDER AND FEMINIST GEOGRAPHY... 183 13.4 FEMINIST THEORY... 186 13.5 SUMMARY... 187 13.6 REFERENCES... 188 LECTURE 14: URBANISATION AND DEVELOPMENT... 189 14.0 INTRODUCTION... 189 14.1 OBJECTIVES... 190 14.2 URBANISATION AND URBANISM: PROBLEM OF DEFINITIONS... 190 14.3 URBANISATION PROCESS... 191 14.3.1 Global Urbanization... 192 14.3.2 Urbanization in Africa... 194 14.4 URBANISATION AND ECONOMIC DEVEOPMENT... 198 14.5 URBAN PROBLEMS... 200 14.5.1 URBANISATION, URBAN POVERTY AND URBAN FOOD INSECURITY... 201 14.6 CONCEPT OF SUSTAINABLE URBAN DEVELOPMENT... 203 14.7 ROLE OF ENVIRONMENT AND CLIMATE CHANGE IN SUSTAINABLE URBAN DEVELOPMENT... 204 14.8 DEFICIENCIES IN BASIC URBAN SERVICES... 205 14.9 SUSTAINABLE MANAGEMENT OF URBAN BASIC SERVICES... 206 6
14.10 INEFFICIENCY OF LAND POLICY IN DEVELOPING COUNTRIES... 207 14.11 SUSTAINABLE CITY FORM... 207 14.12 SUMMARY... 209 14. 13 REFERENCES... 211 LECTURE 15: REGIONAL INEQUALITIES, ECONOMIC DEVELOPMENT PLANNING AND POLICIES... 215 15.0 INTRODUCTION... 215 15.1 OBJECTIVES... 216 15.2 REGIONAL INEQUALITY... 216 15.3 LEVELS AND TRENDS IN SPATIAL DISPARITIES... 220 15.4 DEVELOPMENT PLANNING... 221 15.5 REGIONAL PLANNING... 221 15.7 THE GROWTH CENTRE AND CENTRE-PERIPHERY MODEL... 228 15.8 SUMMARY... 235 15.9 REFERENCES... Error! Bookmark not defined.7 TABLES Table 4.1: Selected Economic Indicators, 2005.. 49 Table 4.2: Social Indicators for Basic Needs.. 49 Table 4.3: Social Indicators for Selected countries, 2005...51 Table 4.4: Correlation Coefficients for Various Indicators 52 Table 5.1: Take-off Period for Countries Shown... 59 Table 5.2: Drive to Maturity Period for Countries Shown.....59 Table 6.1: Three Phases of Globalization Process...72 Table 6.2: The top 20 TNCs in the World, 2005..77 Table 7.1: Economic rent...106 Table 8.1: Countries requiring emergency food aid in Sub-Saharan Africa.114 Table 9.1: Industrial Classification of Economic Activities..126 Table 12.1: Different ways of defining tertiary sector..166 Table 12.2: GDP Composition by sector in selected Countries in 2010 (%) 168 Table 12.3: Labour force by occupations in the Developing and Developed countries 169 Table 12.4: Comparative Advantage of Countries A and B...178 Table 14.1: Urban population size and distribution by major geographic areas, 1950 2030 194 Table 14.2: Selected fastest growing cities and urban areas in Africa..197 Table 15.1 Countries that have adopted Growth Centre Model 230 7
FIGURES Figure 2.1: Backward and forward linkages 25 Figure 5.1: Bristow s model of economic growth 57 Figure5.2: Four interlocking vicious...64 Figure 7.1: The Centres of Origin of Agriculture 95 Figure 7.2a: Von Thunen s concept of economic rent..104 Figure 7.2b: Economic rent for selected agricultural produce..104 Figure 7.3: Land use in Von Thunen s Isolated State...105 Figure 8.1: The inputs and outputs of the Green Revolution.122 Figure 9.1: Weber s locational theory...140 Figure 9.2: The effects of labour and transport costs on location.141 Figure 9.3: The effect of agglomeration on location.142 Figure 9.4: The theoretical shape of the market area.144 Figure 9.6: Hypothetical industrial location decisions linked to the behavioral matrix 144 Fig. 12.1: Relationship between employment and per capita income 168 Fig. 14.1: The urban transition by major regions (in million) 201 Fig. 15.1: Lorenz Curve 219 8
INTRODUCTION TO THE UNIT Dear learner, this material was prepared with you in mind and, therefore, you will find it easy to read, comprehend and enjoy. In the present course unit, you are introduced to the basic concepts of economic geography such as location, agglomeration, development, underdevelopment and economic rent among others. The different ways of measuring levels of development of different countries are examined. Classical and neo-classical theories of growth and development are also critically discussed. The contribution of agriculture, industrialization, urbanization and gender to development is also evaluated. The geography of money as well as regional development and planning are also discussed. The material contains useful illustrations for your easy and quick comprehension, suggested practical activities, which you are expected to carry out (in text questions), and assignments for you to attempt at the end of each lecture. You are expected to write out your answers and mail them for marking according to the instructions that will be provided to you. Welcome to this exciting and interesting Economic Geography course. Unit Objectives At the end of this study unit, you should be able to: Explain the concepts of location, development, underdevelopment and economic rent. Discuss the various ways of measuring levels of development of the countries of the world. Explain causes of underdevelopment in Less Developed countries. Critically evaluate the role of agriculture in the development process. This unit, referred to as Economic Geography, is taught at the undergraduate level to the Bachelor of Education Science students. It is designed to train students to appreciate the complex nature of the development process. 9