Regional Economic Growth: Theory and Policy by Horst Sieberg; Regional Economic Policies in

Canada by T. N. Brewis
Review by: Alan Green
The Canadian Journal of Economics / Revue canadienne d'Economique, Vol. 5, No. 1 (Feb.,
1972), pp. 148-150
Published by: Wiley on behalf of the Canadian Economics Association
Stable URL: http://www.jstor.org/stable/134005 .
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148
during 1929 to 1956. The relative positions of the provinces remain fairly constant over the period: the Maritimes and Quebec persistently exhibit per capita
incomes below the Canadian average, whereas Ontario and British Columbia are
persistently above the national average, and the prairie provinces tend to
fluctuate about the average. Green finds this stability in relative positions to be
"remarkable" given the great changes in the Canadian economy since 1890. In
particular, he comments on the peculiar gap between Ontario and Quebec, and
speculates that lower educational achievement of the labour force and a larger,
lower-productivity A sector lie at the root of the Quebec "problem."
As Green himself readily admits, the problem with this kind of study is its
wholly empirical content: differences in provincial per capita incomes are
measured, and trends in income differences are described, but unfortunately
explanations of provincial income differences are not forthcoming in Green's
book (nor in any other book for that matter). There are a few minor errors (for
example, an incorrect source for the data in Table 1-4, p. 8, two typographical
errors in note 10, p. 110, and Green's interpretation of the data in Table 11-3,
page 28 which does not appear to agree with the data which show the ratio of
labour force to population declining from 1929 to 1956). Also, the use of 1930-1
census data on average earnings of workers to construct an "adult-male equivalent" measure to assess differences in provincial labour force quality for 1956
may have been expedient but is disquieting nonetheless. Finally, Green's
classification of Canadian economic history into a "frontier phase" from 1890 to
1910 and a "maturity phase" from 1910 to 1956 is not entirely convincing.
These few comments notwithstanding, Alan Green has produced a significant
contribution to the stock of quantitative studies of Canadian economic history.
However, the teacher of economic history is likely to find the book of limited
value to students, especially undergraduates, (it is a technical book which does
not lend itself to superficial reading of "results only" by students lacking familiarity with national accounting concepts) who would probably gain more from
consulting Green's article "Regional Aspects of Canada's Economic Growth,
1890-1929," Canadian Journal of Economics and Political Science, XXXIII
(May, 1967), 232-45.
PETER GEORGE McMaster University

Regional Economic Growth: Theory and Policy. By

HORST SIEBERG.

Penn.: International Textbook Company. 1969. Pp. xiii, 217.

Regional Economic Policies in Canada. By T. N.

BREWIS.

Toronto:

The Macmillan Company of Canada. 1969. Pp. 303.

"Poverty amidst plenty" is one of the main problems which confront modern
societies as they enter the last third of this century. Although the phrase generally
refers to the plight of poor families, it is also applicable to groups within society
and extends even to whole regions. It is concern with disparities of the latter
type which is the subject of the two books reviewed here. Both books, though

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Reviews of Books!Comptesrendus

149

vastly different in their respective approaches, nevertheless seek answers to the

same two basic questions: Why do standards of living of sub-national units
differ and why do observed differences persist over long periods of time?
Siebert approaches these problems entirely at the theoretical level. His is
primarily a textbook aimed at advanced graduate students with a fairly extensive background training in mathematics and growth theory. Presuming such
background knowledge, the author proceeds to build spatial factors into the
basic growth model. He takes as his job the systematic inclusion of space or
regional interaction into the discussion of national and sub-national growth.
The book by Siebert is divided into two main sections. The first builds, step
by step, the major determinants of growth in a closed economy. With this in
place (and it is largely a review for students with any background in this area),
the author opens the model, concentrating on the economic determinants of
interregional factor and commodity flows. On the whole, the latter is quite well
done and the final union of flows with internally generated determinants of
growth is interesting and, although somewhat involved, is handled quite
systematically. Basically this first section is good but uneven, i.e., repetitive in
places for students with previous training and somewhat brief for students
with a thin background.
The second major section covers the theory of public policy. It is quite good.
Drawing on the earlier developed growth theory models, Siebert combines this
with the goals and instruments of public policy as applied to the area of regional
disparities. As an exercise in logical thought in the various "trade-offs" between
competing goals, it is valuable not only for students but for policy makers,
especially the part which sets out the rigour needed in designing approaches to
eliminate regional disparities, e.g. how much inequality is tolerable and what is
the best time path to reach this level.
The application of such rigorous analysis to regional policies in Canada, at
least after reading Brewis' accounts of the operation of government policies tried
in this country, would certainly seem essential. In setting out the discrepancy
between what is discussed about regional development policy and what, in fact,
emerges, Brewis has done a great service to students in this area. Briefly, as
Brewis describes it, development policies have generally surfaced as short run
schemes aimed at bolstering local unemployment or as welfare schemes involving
direct income transfers. The longer run goals of raising the standard of living,
generally by affecting significant structural changes, fell prey to short-run
imperatives. To be fair, the latter are sometimes essential, especially where
extreme hardship must be relieved quickly, but the persistent failure to set and
follow systematically longer term targets is disturbing.
Professor Brewis demonstrates this bias towards a short-run or highly specific
approach to regional problems by describing the origin, purposes and early
results of three major programmes: the Agricultural and Rural Development Act
(ARDA); the Area Development Agency (ADA); and the Atlantic Development
Board (ADB). The main lesson which emerges from this review is the failure of
the programme designers to perceive the inherent interdependences involved in
solving regional problems. Each sclheme focused on a particular problem. The
ADA saw regional problems in terms of pockets of high unemployment. Its

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150
response was to promote an inflow of capital to the depressed area. Alternative
solutions, such as encouraging redundant labour (and new capital) to migrate to
areas of potentially high growth were ignored. A similar narrow approach was
followed by the ADB. This agency chose to concentrate on building up infrastructure, especially power supplies. However, in the absence of a long-term
development strategy (made difficult by provincial rivalries), assessment of
alternative investments programmes was not undertaken. ARDA may be the
one exception. It has evolved from a focus on the physical factors of rural poverty
(i.e. improving land use) to a wider concern for rural development. The switch,
if carried through, is profound, for it stresses the relocation of underemployed
farm labour and the consolidation of farms into efficient production units, both
necessary prerequisites to the solution of this problem. Even a brief review such
as this, leads one to share with Professor Brewis his hope that the creation of the
Department of Regional Development will force policy makers to place the
problem of regional growth in a wider perspective.
To bring the regional problem into wider relief, Brewis devotes the first third
of his book to a statistical overview of the extent of income inequality (an interesting appendix by T. K. Rymes sets out clearly (in terms of regional production
accounts), the type of regional statistical information which would (if available in
the future) assist researchers and policy makers in assessing the causes and
establishing programmes to reduce regional disparities). This discussion of the
extent of regional differences is interesting, although rather thin. It would have
been even more helpful had Professor Brewis concentrated his outline on the
postwar years, and shown systematically changes between regions in their agesex composition, labour, and output structure, etc., say at two or three poinlts of
time. The chief advantage of such an approach would be to give the reader a
more systematic view of the regional trends and particularly to introduce the
interactions between the sub-national units, i.e., the resource-oriented west
versus the manufacturing or older regions in the east.
This minor point aside, Brewis has provided a useful book for all those interested in the problems of regional income inequality in Canada. Siebert's work
gives to researchers and policy-makers the essential theoretical basis on which
to analyse these problems, particularly the necessity of focusing on the determinants of interregional commodity and factor flows. Until we understand how
these markets operate, within the Canadian context, attempts at effective policy
solutions to regional problems are destined to yield a low return.
ALAN GREEN

Queen's University

Canada's Experience with Fixed and Flexible Exchange Rates in a

North American Capital Market. By ROBERT M. DUNN, JR. Washington,
DC: Canadian-American Committee, sponsored by National Planning
Association (USA). Montreal: Private Planning Association of Canada. 1971.
Pp. 74. $2.

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