NE1029: Rural Change: Markets, Governance and Quality of Life
Statement of Issues and Justification
Rural communities are comprised of the people, their businesses and farms, their organizations and governance. The quality of rural life both affects and is affected by the movement of people into and out of rural communities, the evolution of agriculture and industry, local social organization, and public policy. The future of rural America depends on decisions made by citizens, businesses and government officials at all levels. While much of the activity is local, many of the challenges and issues are common across counties and states. Citizens and policymakers alike are in need of high-quality, timely research and outreach to help them understand the forces shaping their communities and the role of public policy in addressing these changes.
We propose to reorganize ourselves to undertake a new multi-state regional research project that considers four interdependent themes that cause and are caused by rural change. Broadly, the four themes concern rural labor markets, rural industry, rural governance and how each both impacts and is affected by the rural quality of life. Stakeholders in rural communities have identified these themes as important for rural people and places.
Imagine a fictional rural town called Lake Hyatt that has undergone significant changes over the past several years. What were once summer cottages are being converted into year-round homes with owners retiring into the area, raising concerns for both longtime residents and newcomers about quality of life. What were once working forests are now being set-aside for recreational use, changing the structure of local businesses. Historically well paying lumbering and wood processing jobs are being replaced with lower paying service jobs, and these labor market changes influence commuting patterns and family well-being. At the same time, the demands on local governments are changing as these new in-migrants are placing demands on services and may also be running for elected office. These changes in fictional Lake Hyatt illustrate the linkages of the four objectives of the proposal - amenities and quality of life influencing residential location choice, changing industry structure altering jobs and earnings, and local government impacts in terms of revenues, services and the capacity of local leaders. The types of changes and their consequences differ greatly across the rural communities of America, but what is universal is the interrelationships among these changes and the need for research and policy to help rural communities adapt and thrive.
Concerning the first theme about rural labor markets, agricultural economists and rural sociologists with significant experience studying rural labor issues will collaborate on investigations into the causes and consequences of rural poverty, low skill/low wages, the rural "brain drain," commuting, and migration. These challenges are felt in all states. Furthermore, the issues of interstate commuting and interstate migration are particularly relevant for multi-state collaboration. We also propose to investigate new ways to enhance rural labor quality through education, training, workforce development, and entrepreneurship and creative class strategies appropriate for rural areas. These alternatives are also likely to affect farm household labor supply and off-farm employment opportunities. Market mechanisms, including labor markets, can only facilitate the employment of people who have things to sell. Markets cannot provide incomes to people who cannot work. Non-market mechanisms, such as publicly provided education or income redistribution are needed when and where markets fail. If we do not continue to improve our understanding of how rural labor markets work and how they fail, we risk continued or worsened suffering, unemployment, rural out-migration, and poverty.
On the other side of the rural labor market is industry. As the President of the Nevada Farm Bureau recently said, "We still don't know just how we are supposed to go about attracting 'high-wage' jobs to town." Industry turnover is a fact of life. The question is, what businesses are a good fit for rural communities today? Thus, agricultural economists with experience studying rural industry propose to investigate solutions to sources of fluctuations in employment demand. In particular, because rural industry is sparse, with long distances between enterprises that may be linked through purchases and sales, we propose to measure the maximum distance thresholds between linked establishments, and to study the causes and consequences of deindustrialization, industry restructuring, and industry clusters. We will also include self-employment, entrepreneurs, innovative behaviors, and emerging industries such as bio-fuels and other interdependencies between farming and the rest of the rural economy.
A recent paper by the IBM Center for the Study of Government summarizes the environment surrounding government in the United States. "A concern for efficiency is being supplanted by problems of governance, strategy, risk management, the ability to adapt to change, collaborative action and the need to understand the impacts of policies on society" (Breul, 2006: p. 7). These are huge issues with which government is struggling to respond on several fronts. Citizens have shown increasing impatience with governments that have not moved quickly enough to respond to the challenges by providing their own "fixes" through support for term limitations and tax and expenditure limitations, initiatives on constitutional amendments and direct statutory approvals, and founding of new governments, both general purpose and single purpose special districts.
Research on these challenges and responses has concentrated on federal and state government, but these issues are also the milieu of local governments, the smallest of which lack professional expertise and fiscal resources that might allow more proactive responses. Local governments currently face a confluence of several trends which are challenging the ability of local officials to manage budgets and meet the demands of citizens for local government services. Agricultural economists and sociologists who are adept at studying issues of local public finance are poised to collaborate in this project to investigate the following challenges confronting so many rural communities: fiscal crisis, fragmentation, zoning and land use, property taxation, tax expenditure limitations and term limits. The same team has made progress investigating innovative solutions to governance problems, such as e-governance and the potential for local community networks to enhance local public good and service provision at lower cost.
Our images of rural areas are still dominated by pastures, working forests being actively harvested and mountainous landscapes dotted with mines. For much of the past century, rural communities have struggled with population and employment loss, high rates of poverty and a paucity of financial resources to provide basic services to residents. Not all rural communities are facing these pressures, however. Many communities are experiencing high rates of population, income and employment growth. Most of these communities are heavily endowed with natural amenities. Rather than extracting natural resources for external markets, these communities have begun to build economies based on promoting environmental quality and a high quality of life. This shift in rural economies from extraction of natural resources to promotion of quality of life and natural and cultural amenities in particular is apparent throughout Europe and North America.
Prior research has demonstrated that amenities and quality of life strongly influence the economic growth and development of rural areas. The research is also clear that natural amenities are to an extent a necessary but not sufficient condition for growth. Rather, there must be economic institutions in place that are able to capture economic activity. For examples, pristine lakes cannot capture economic activity unless there are developed camping sites, marinas and other recreational-based businesses in place. In other words, the type of amenity in place, natural or built, matters.
Given the growing importance of natural amenities in some high environmental quality rural regions, a critical issue is the interdependence between natural amenities and the regional population that simultaneously depends on and threatens the ecosystem and its natural amenity services. Human impacts from population growth and land development can generate congestion and ecological degradation that degrade the very amenities that attract people to the region. Examples include population growth and low density development around national parks in the mountain west, which increase land fragmentation and reduce lowland habitat for wildlife. On the other hand, population growth may lead to additional investment in the provision of natural amenities and additional support among residents for conservation policies that protect natural amenities.
Jobs, market goods, opportunities, amenities, and social life are woven together in rural places to determine rural quality of life. This project would expand the successful collaboration investigating the significance of environmental issues, farm sector multi-functionality, rural health care, lake tourism and other rural amenity issues in rural development. We need to understand how to ensure the provision of non-market rural amenities to achieve sustainable rural development. If not, we risk suffering the consequences of rural sprawl, 'slash and burn' rural economic development, resource overexploitation and environmental degradation: community impoverishment, out-migration, and community abandonment.
This project requires social science. Feasibility depends on the degree of innovativeness and the quantity and quality of scientific method applied to each topic. Because the problems are common across states, we enjoy efficiencies and returns to scale by collaborating. We can cover multifaceted issues by parsing the facets and specializing, then meeting to organize the whole. Although many challenges are the same, states are also different. This interstate variation helps to statistically identify relationships between dependent and explanatory variables. Thus, interstate collaboration helps provide more suitable cross-section data bases. Multi-state collaboration also lends valuable support to innovation, which is by definition the application of an existing invention to a new purpose. By interacting in a multi-state group we achieve intellectual synergies. By incorporating a multidisciplinary approach, the project will integrate the insights and methods of agricultural economists, rural sociologists, demographers and regional scientists in order to provide a more complete analysis of the changes occurring in rural communities. The multidisciplinary approach of the project is evidenced not only by representation of different disciplines on the team, but more importantly, by the fact that many of the participants employ multidisciplinary approaches, have training in multiple fields, work with coauthors in other disciplines and publish in journals in a range of social science disciplines including economics, sociology, regional science, public policy and demography.
The research objectives of this project are highly consistent with the goals of CSREES and other organizations concerned with rural communities. Improving human well-being and community quality of life represent two fundamental goals of development efforts. Thus, an understanding of attributes and forces that enhance or detract from individual and household well-being and/or from community quality of life is important for guiding decision-making on policy. The research will lead to increased knowledge of the forces impacting rural communities in terms of labor markets, industry, governance, and quality of life. The impact of this research will be seen in better understanding among community leaders and citizens of the dynamics of labor markets and businesses and their effects on rural communities. Without this research, decision makers in communities will be more likely to base decisions on outdated or imprecise notions of the causes of changes in the economic and fiscal situation of rural communities. Without understanding the causes of local fiscal stress, it is difficult for citizens and policy makers to make informed decisions on taxes and expenditures. Finally, without better understanding of the role of quality of life in location decisions, communities would be less able to guide their economic development efforts and sustain themselves in the face of change.
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