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Patterns of frontier development: a dynamic model of resource extraction in the Brazilian Amazon

Published online by Cambridge University Press:  14 September 2015

Richard T. Melstrom ,
Luke R. Jones  and
Jill Caviglia-Harris
Richard T. Melstrom
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Agriculture Hall, Stillwater, OK 74078, USA. E-mail: [email protected]
Luke R. Jones
Affiliation:
Department of Economics and Finance, Valdosta State University, GA, USA. E-mail: [email protected]
Jill Caviglia-Harris
Affiliation:
Department of Economics and Finance, Department of Environmental Studies, Salisbury University, MD, USA. E-mail: [email protected]
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Abstract

Developing countries are known to exploit their resource frontier to achieve growth objectives and reduce poverty. This can lead to long-term positive outcomes or – if resource exploitation is unsustainable – lose–lose outcomes that leave populations and ecosystems worse off. This paper introduces a dynamic model of resource exploitation to explain how regions may succumb to, avoid or escape this negative outcome. The theoretical model characterizes a frontier community that uses soil as an input into agricultural production. The model shows that there may be a critical point in the soil stock that determines whether agricultural activities lead to sustainable development or a collapse in local income. This suggests that, in the event of a resource collapse, temporary adjustments to the system may permanently rehabilitate the resource base and change a community's development pattern. Calibration of the model to several frontier states of the Brazilian Amazon points toward an overall outcome of steady development.

Type
Research Article
Information
Environment and Development Economics , Volume 21 , Issue 3 , June 2016 , pp. 350 - 370
Copyright
Copyright © Cambridge University Press 2015 

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