ABSTRACT
Economic base theory is widely used to understand local economic development in the United States and Canada. Its underlying premise, that the external demand for a region’s products is the primary determinant of regional prosperity, is widely accepted. Learning economic base theory thoroughly should be a top priority for economic developers because this knowledge will facilitate better communication with economic development colleagues, political leaders, and others interested in promoting the regional economy. Economic base theory was originally developed as a practical technique to evaluate the local economy for mortgage underwriting and was subsequently used by urban planners to predict metropolitan population growth. Economic developers should continue to build on and improve the export staple as long as it remains competitive in the larger economic system. Economic developers tend to consider export sector expansion and import substitution as attractive strategies to encourage economic growth.
