Resource Dependency and Rural Poverty: Rural Areas in the United States and Japan*

Abstract Although rural residents often expect resource extraction to lead to local prosperity, much of the recent research finds that resource extraction is associated with poverty. This paper tests these results by examining whether the findings may be due to methodological factors such as the tendency to focus on extreme cases, particular extracting sectors, and certain periods of time. By comparing two localities that have followed very different developmental trajectories—the state of Wisconsin and Hokkaido Prefecture in Japan—during the period from 1970 to 1990, this paper addresses these issues. The results do not clearly support either the expectation that resource extraction will lead to poverty or that it will lead to economic prosperity. Instead, like a handful of studies on resource dependency, the results indicate that the relationship between extraction and poverty is unique to location. Despite the many differences between the United States and Japan, the strongest correlates of poverty in each country involve the proportion of land in an area that is forested. Particularly because these results mirror the findings from the one previous study that included this variable, future research must give greater attention to this explicitly environmental variable, as well as examining some of the possible reasons for the relationship.