Economic Localization Revisited


Eva Frankova, Department of Environmental Studies, Faculty of Social Studies, Masaryk University Jostova 10, 602 00 Brno, Czech Republic. E-mail:


The concept of economic localization, although receiving increasing academic and practical interest, still lacks a solid theoretical background. Our aim here is to suggest a working definition of the term economic localization and to outline its possible interpretations and operationalizations. Based on a detailed analysis of six monographs on the subject, we: (i) summarize the content of localization narratives as presented by the individual authors, capturing the variability of the localization agenda; (ii) present 11 localization dimensions and 17 more concrete aspects of localization arguments as a way to structure and operationalize the concept; and (iii) suggest a condensed working definition of the economic localization concept. We argue that it is crucial to acknowledge the complexity of the economic localization agenda, which should not simply focus only on some of its aspects without keeping a sense of the whole in mind. We thus propose to define economic localization as both the process and the result of moral, political and practical support of as many localized aspects of production and consumption as possible and desirable. Finally, we discuss the construction of “the other” within the localization argument, and the position of the localization concept within the research agenda of ecological economics. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.


The idea of economic localization is not new. In fact, we may repeatedly find it discussed in various areas. First is the well-known Small is Beautiful by Schumacher (1993/1973), which can be seen as one of the basic works of localization thinking, of ecological economics and of environmentalism in general. We might also consider the socio-ecological visions of Bookchin (1962, 2004/1971), or the concept of swadesh, i.e. local embeddedness in a community and the natural environment, described by Gandhi (1995, see also Parekh, 1991), as well as bioregional thinking as represented for instance by Snyder (1995), Sale (2000) and Thayer (2003).1 However, here we focus predominantly on the concept of economic localization within the contemporary social–ecological–economic context, where it has specific meanings and importance.

This contemporary context can be interpreted as a period of crisis, or even multiple crises (environmental, social and economic), sometimes described as a triple crunch, referring to the problems related to climate change, peak oil supply and the financial crisis (New Economics Foundation, 2008; Schneider et al., 2010; Leggett, 2011). In search of the sources of these problems, critical attention has been devoted to the impacts of the current form of neoliberal capitalism as formulated by, for example, Gray (2002), Leyshon and Thrift (2007) and Harvey (2006), and also to the impacts of economic globalization. This process and its impacts are sometimes straightforwardly and strongly criticised (as in Goldsmith and Mander, 2003 or Korten, 1995); in other cases they are perceived at least as ambiguous (e.g. Bauman, 1998; Robinson, 2002). However, such critical voices remain marginal. In the last few decades, it has been hard to question, let alone oppose, the world-wide process of economic globalization. “The hegemony of the globalisation ‘thesis’ extends from the conservative right to even those who claim to pursue a more inclusive, democratic and socially progressive agenda. […] This ideology becomes a vehicle for suppressing possibilities of resistance and the formulation of alternative trajectories” (Swyngedouw, 2004: 29).

Being explicitly based on opposition to the “hegemony of globalization”, economic localization can be seen as an attempt to develop a potential “alternative trajectory” to economic globalization. Its proponents in both public and activist arenas consider economic localization to be one of the most important strategies for developing sustainable means of satisfying human needs (Mitchell, 2000; Woodin and Lucas, 2004; Shuman, 2006; Estill, 2008; Owen, 2009). Community-supported agriculture (CSA), local currency initiatives, farmers' markets, urban gardening, community land trusts or small-scale credit unions2 are assumed to bring the environmental benefits of shortened distribution chains, stronger local economies and enhanced social relationships within communities.

Food production and consumption in particular have become not only a focus of activist practice, but also a distinct subject of academic interest, labelled alternative food networks (Winter, 2003a), alternative systems of food provision (Watts et al., 2005) or more generally alternative food geographies (Maye et al., 2007), and often connected specifically to the theme of economic localization (e.g. Hinrichs, 2003; Winter, 2003b)3. Winter (2003b: 23) describes a significant shift in geographers' and spatial planners' emphasis from globalizing tendencies and the global-agro food system (as in Le Heron, 1993) to considerations of sustainability within agro-food systems, and to the “growing recognition of the significance of locality within a globalised food system” (Winter 2003b: 24).

Not surprisingly, this development has resulted in new questions and doubts, not only about the oft-presented connections between economic localization and sustainability or its particular aspects, but also about the very meaning of the term economic localization. Some support of economic localization has been given by Seyfang (2007) writing about the social implications of a local organic food initiative, and Gelleri (2009) describing the theory and practice of a local currency scheme. On the other hand, there is also a wide spectrum of critics of localization (e.g. DuPuis and Goodman, 2005; Born and Purcell, 2007; North, 2009). However, what all of them have in common is the absence of a basic definition of economic localization, a complex overview of the localization agenda and a solid, wider analytical background.

The aim of this paper is thus to suggest a working definition of the term economic localization and to outline its possible interpretations and operationalizations. After introducing the context of the research and the methodology used, we present the results of a detailed analysis of six monographs from selected authors. The following section provides: (ii) six localization narratives as presented by the individual authors; (ii) 11 localization dimensions and 17 more concrete aspects of localization arguments as a way to structure and operationalize the concept; and (iii) a condensed working definition of the concept of economic localization. Whereas the first point enables us to capture the inner variability of the localization agenda, the latter two focus on the common grounds of the concept. We then discuss two broader issues arising from the localization debate: the construction of “the other” within the localization agenda by creating a strong opposition between localization and globalization, and the position of the localization concept within the research agenda of ecological economics.

Context and Methodology

When discussing the definition and interpretation of the term economic localization, we acknowledge that there is a plurality of perspectives that cannot and should not be reduced, an assumption of the post-normal science approach as specified and discussed by Funtowicz and Ravetz (1994). Moreover, this plurality is not “plain”, but always involves different actors and power relations already present in the very way in which questions are raised, problems are framed and which language dominates these processes – a view raised by the political ecology approach (Martinez-Alier, 2009). Swyngedouw (2004: 33) further explains that in the so-called politics of scale, “struggling to command a particular scale in a given socio-spatial conjuncture can be of eminent importance. […] The continuous reshuffling and reorganisation of spatial scales are integral to social strategies and serve as the arena where struggles for control and empowerment are fought.” In this sense, the meaning of the term economic localization is continuously socially (re)constructed, and cannot be seen as existing independently of particular social contexts.

Here we present the perspective of economic localization proponents whose position is somewhere on the border between activism, practitioning, action research and academia, with more emphasis on the first two areas. The selection of authors outside professional academia follows the post-normal science strategy of extending the “community of peers” to the “peer community”, i.e. to open the field also to activists, practitioners, journalists and others so that they can influence the debate (Funtowicz and Ravetz, 1994: 203–204). To represent this stream of thought, six authors and their monographs were selected according to the following criteria: publication between 1995 and 2010, and fully focused on the theme of economic localization (see the preliminary definition below), even if not using this precise term; the authors take a predominantly economic standpoint, i.e. they use economic argumentation and think in economic terms, but not fully in accordance with the economic mainstream4; their argumentation is not always purely academic, but they use data to support their statements and provide theoretical and/or systemic explanations and insights; they also discuss economic localization in general, not only a specific sector of this field.5

The authors selected according to these criteria are: Douthwaite (1996), Shuman (1998), Hines (2000) and Helena Norberg-Hodge et al. (2002), using specifically the term (economic) localization, Desai and Riddlestone (2002), using the term bioregional development, and Hopkins (2008) with his model of transition towns, using also the terms local resilience and localization. We hereafter refer to this group as the “analysed authors”.

As a preliminary definition of economic localization at the selection stage we use the definition developed by Johanisova (2007: 30–31):

[Economic] Localisation can briefly be defined as both the process and the result of a moral, political and practical support for locally owned businesses (including co-operatives, community enterprises etc.) which use local resources, employ locals and serve primarily local consumers. As a corollary to local ownership, production and consumption, localisation entails efforts at local self-sufficiency and a declining reliance on imports, which leads to a more diversified economy in terms of production of goods and services. The content of the term ‘local’ (i.e. the scale) varies, depending on the author and on the perspective adopted […] An important strand of most localisation thinking is the support of localised finance, credit and capital investment, local currencies as well as a non-commodified and non-monetised economy. In some perspectives, localisation also entails or leads to a decentralisation of settlement, government and production, and communal ownership of capital. The thrust for localisation has both pragmatic and ethical underpinnings.

Our analysis is based on the grounded theory approach, and consists of the detailed reading and manual coding of the texts, grouping of the selected quotations based on this coding, selecting representative quotations, and determining their contexts and interrelationships.6 More specifically, our process of analysis was as follows. (i) Through the coding process, the six following codes emerged and enabled us to capture and structure the complexity of the economic localization concept described by the analysed authors: the definition of economic localization (even if implicit), main aim, main areas/issues, main actors, vision/ideal model of the functioning of the economy, and main localization principles and/or policies. We designated these codes as categories and used them to summarize the localization narratives (see Table 1). (ii) During the same process of coding, another group of frequent codes was developed addressing the particular areas of interest of the localization authors and the issues present within their localization argumentation. We designated these codes as dimensions of economic localization and used them to structure the specific areas of localization argumentation (the aspects of economic localization) in Table 2. All these points were shared, although with varied emphasis, by the localization authors, and all of these points can be seen as crucial for operationalization of the economic localization concept. (iii) In the last step, we grouped all the quotations coded as “definition”, including the preliminary definition from the selection stage (see above), and combined their main points (also with respect to the dimensions mentioned above) into one condensed working definition of economic localization.

Table 1. Analysed authors and summary of their localization narratives according to the six selected categories
AuthorDefinition of (economic) localizationMain aimMain areas/issuesMain actorsVision/ideal modelMain principles and/or policies
  1. a

    WTO, World Trade Organization; WLO, World Localization Organization; GATT, General Agreement on Tariffs and Trade; GAST, General Agreement on Sustainable Trade (Hines, 2000: 130)

ShumanGoing local does not mean walling off the outside world. It means nurturing locally owned businesses which use local resources sustainably, employ local workers at decent wages and serve primarily local consumers. It means becoming more self-sufficient, and less dependent on imports. Control moves from the boardrooms of distant corporations and back to the community, where it belongs.Higher community control over its destinyLocal production for local needs, local ownership and local money circulationLocal communities, local and national governments (assisting role)Community corporations1. Stopping the destruction of local quality of life to satisfy mobile corporations and develop instead community corporations which aim at enhancing local quality of life
2. Stopping the focus on exports and striving instead to shift from insecure dependencies by developing new businesses which substitute imports and satisfy basic human needs
3. Claiming the legal and political power necessary for nurturing local businesses
Desai and RiddlestoneEach country satisfies its basic everyday needs from local resources as much as possible; internationally traded goods are only those with high added value which bring high revenues and low environmental impacts.Lowering of ecological footprintRegional production, consumption and recyclingLocal communities, markets, national governments (limited regulation role)Bioregional development, network production/network economy1. Use of local renewable and recycled waste resources for satisfying more of our everyday needs
2. Reaching sustainability via market trading
3. Life within our planetary means leaving space for wild species and wilderness
HinesLocalization is a process which reverses the trend of globalization by discriminating in favour of the local.Reclaiming control by communities, regions and national states over their economies, reduction of transport of goods and servicesInternationalization rather than globalization, rules for international tradeLocal communities, transformed international institutions, national governmentsChange of the rules of international trade and development aid, transformation of WTO to WLO, and GATT to GASTa, positive discrimination in favour of the local1. Protection of national and regional economies against imports of goods and services which can be produced locally
2. Rules for industry requiring local production for local selling
3. Localization of financial transactions in favour of community economics regeneration
4. Local competition policies to ensure high quality of goods and services
5. Introduction of taxes on primary resources and other taxes to get funding for such a transition to localization which ensures adequate nature protection
6. Democratic participation in local economic and political systems
7. Transformation of trade-and-aid policies so that they contribute to the regeneration of local economies rather than to international competition
HopkinsHigher resilience and stronger local economies mean to be better prepared for a leaner future, to be more self-sufficient and prefer the local to the imported. It is building the ability to produce locally those things which we can.Higher resilience of communitiesAgriculture, healthcare, education, economy, transportation, energy and housingLocal communities, local and national governments (assisting role)Transition movement1. Reduction of dependence on fossil fuels and lower energy use
2. Building resilience
3. Joint and immediate action
4. Creating lifestyles which are more connected, enriching and respecting the biological limits of planet Earth
DouthwaiteLocalization does not mean to produce everything locally, nor does it mean the end of trade. Simply it means creating a better balance between local, regional, national and international markets. It also means that big corporations have less, but communities more control over what is produced, where and how, and that the trade is more fair and brings benefits to both sides.Stable and sustainable communitiesLocal/independent financial and banking system, energy from local renewable resources, and locally produced basic food and clothesLocal communities, local and national governments (assisting role)Peasant economy, community economy1. Use of local resources for satisfying the needs of community rather than desires of distant markets
2. World prices must not define what we are going to produce
3. Our key production systems function without inputs from the world system
Norberg-Hodge et al.The shift towards localization simply means achieving a healthy balance between trade and local production, and an end to the fiction that trade is always beneficial for all parties and more trade is always better than less. It means realizing that what is important is not the market price of food, but its costs – for the environment, rural livelihoods, human health and sense of community.Limiting all unnecessary trade and strengthening and diversifying economies at the local and national levelLocal food productionLocal communitiesLocally adapted food systems1. Limiting the size and economic power of transnational corporations
2. Higher taxes on non-renewable energy resources, especially fossil fuels
Table 2. Overview of general dimensions and concrete aspects of economic localization as introduced and discussed by the analysed authors
Dimensions of the concept of economic localizationConcrete aspects of economic localization within particular dimensions
  1. a

    In neoclassical terms this includes land/natural resources, labour and capital (as in Samuelson and Nordhaus, 2007). Alternatively, all of these can be described as capitals (ecological, human, social and organizational, and manufactured), as for example by Ekins (1992: 48–61)

Spatial/geographical dimensionattempts to shorten distances between production and consumption
 preference for locally sourced factors of production,a whereas know-how and innovations are globally shared
Environmental dimensionemphasis on sustainability of production and consumption
 the most feasible closed circulation of matter and energy, including management of waste as a resource
Economic dimensionpreference for local ownership of factors of production – individual or community
 emphasis on local circulation of money and local financial capital
Social dimensionemphasis on community building and cooperation
 preference for local consumers and satisfaction of their needs
Cultural dimensionattempts to preserve and cultivate local cultural practices, craft skills, etc.
Political dimensionpreference for democratic decision-making
 attempts to retain decision-making processes at the lowest possible (preferably community) level (i.e. the principle of subsidiarity)
Ideological dimensioncounterbalance to economic globalization, ideological alternative to the prevailing economic system and concept of economic development based on free trade
Moral/ethical dimensionbuilding of relationship and responsibility to a specific place
 support also for the non-monetized economy and satisfaction of non-material needs
Strategic dimensionlowering import dependences and building resilience to fluctuations of the global economy
Land-use planning dimensiondevelopment of infrastructure supporting local production and consumption
Practical/physical dimensionpractices of local production and consumption in particular spheres (food, energy, money, transportation, housing, manufacturing, etc.), the physical activities themselves, and their consequences in the physical world

Understanding Economic Localization

There is a certain level of variability among the analysed authors. Each has his/her own specific issues, a unique mix of arguments, and visions about a more localized system of production and consumption. This variability is captured by the six localization narratives presented below. However, there is significant overlap among the narratives, involving common points and shared ground, which enable us to operationalize and define the concept of economic localization as a particular stream of thought. This common basis is expressed below through localization dimensions and aspects, and the suggested working definition of economic localization.

Diversity of the Localisation Authors

An overview of the six authors' localization narratives according to the categories developed during analysis (i.e. definition, main aim, main areas/issues, main actors, vision/ideal model, and main principles and/or policies) is provided in Table 1. Each row represents one narrative and thus one author's approach. Here we comment on some differences between the authors within the specified categories.7

There is one main aim shared across the board, that of communities8 regaining more control over their future developments. Desai and Riddlestone also stress the need to lower our ecological footprint, while Hopkins devotes significant space to the problems of peak oil and climate change, and the related aim of strengthening the resilience of communities. The other analysed authors introduce similar environmental arguments, but mostly as one (albeit important) part of a complex argumentation, not as a particular motivation for localization. Douthwaite and Hopkins argue that the development towards economic localization is not a matter of theoretical academic discussion or voluntary choice, but rather an inevitable scenario. In their view, we had better willingly and gradually take this direction, otherwise we will be forced to do so by advancing peak oil and climate change. They both imply that such an enforced transition might cause us more pain than a voluntary one.

The category of main areas and issues is the most diverse. Douthwaite, for example, structures the main part of his writing according to the areas of finance, energy and food, where he believes it is most important to satisfy more needs locally and independently of an unstable global system. Hopkins presents his list of relevant areas within his vision of the localised UK in the year 2030 (Hopkins 2008: 104–121).

Regarding the main actors, all the analysed authors, except Hines, express a strong emphasis on grassroots community initiatives as a crucial acting agent of change. In their view, even if local, regional and national governments can certainly support the shift to localization by creating particular incentives and an appropriate institutional environment, they cannot be expected to initiate these changes. The most important step for communities therefore is to develop viable alternatives on the ground as soon as possible. Hines, by contrast, places much more emphasis on the need to change the international institutional setting (especially the character and mission of the World Trade Organization and its core trade agreements). Although community initiatives are also important in his view, their role is above all to create pressure on national governments to change “the rules of the game”. He promotes localization as a “specific (and benign) form of protectionism”, favouring the local (Hines, 2000: 153, 245), and he applies his suggested policy changes also to the tensions between the global North and South.

With regard to the vision or ideal models of the functioning of the economy, we find two differing positions. Shuman and Desai/Riddlestone build their local economic model on the existing market economy and do not systematically criticise the basic assumptions of mainstream economics. Their aim is rather to remedy some of the economic system's negative impacts (i.e. the loss of democracy especially at the local level due to the increasing power and subsidization of multinational corporations, environmental externalities, etc.) and so actually to enhance the functioning of the market.9 A showcase example in Desai and Riddlestone is their model of bioregional network production, which, while aimed at reducing environmental impacts and the ecological footprint, is based on joint marketing and on the logistics of small-scale producer networks that supply conventional supermarkets.10 On the other hand, the remaining authors explicitly contrast the existing economic system with their more localized alternative. As Douthwaite (1996: 332) puts it, “The market economy relies on competition to control the way businesses behave. As this will not work in a community economy, new approaches and attitudes towards how we should interact commercially need to be found.” The suggested principles and policies are then in accordance with the differences described above, reflecting the various authors' diverse emphases on community/institutional solutions, and their more or less radical positions vis-à-vis mainstream economic theory and the practices based on its assumptions.

However, despite the differences described in this section, all the analysed authors can be seen as representing a rather coherent stream of thought. A substantial part of the differences among the narratives is more due to varying emphasis on particular issues than to direct opposition or disagreement. The only issue on which we see significant disagreement is the level of reliance on, or opposition to, market solutions, and the question of the compatibility of the current economic system with economic localization (see Discussion).

Common Ground

During the coding process, we derived 11 dimensions addressing the particular areas of interest of the localization authors, and we used them to structure the specific issues present in the localization argumentation – the 17 aspects of economic localization, as listed in Table 2.11 As already noted, all the analysed authors are essentially proponents of economic localization, i.e. they interpret the presented aspects of economic localization (see Table 2) either directly as positives (as with lowering import dependence and building resilience to fluctuations in the global economy, or development of infrastructure supporting local production and consumption) or as bringing subsequently positive outcomes by their application (assumed higher local long-term employment especially in rural areas, enhanced social capital or a higher local multiplier effect as a consequence of emphasis on the local circulation of money).12 However, we tried to distil and formulate the presented aspects as open to different interpretations.

Although the structure presented in Table 2 is certainly not the only one possible,13 we argue that it is crucial to acknowledge the complexity of the localization agenda, as expressed here by the number and the content of the concrete aspects of the localization argumentation. For the authors analysed here, economic localization does not mean simply attempts to shorten distances between production and consumption, preference of local ownership of factors of production, emphasis on community building and cooperation, priority of local needs satisfaction or any other single issue. Economic localization includes a complex mixture of all the presented aspects, to a varying extent and with many local variations. In our view, this complexity should not be reduced to focusing only on some of the aspects without keeping the whole in mind.

It is also important to emphasize that in all the concrete aspects of economic localization (see Table 2), the “if possible” rule applies, i.e. they are not seen as absolute. Instead, the preference of “localness” of these aspects and the emphasis on their active development, not their necessity in all cases, is suggested. In a similar vein, all the analysed authors repeatedly stress that economic localization certainly does not mean any attempts at absolute autarky or disconnection from global influences, be they economic, cultural or other. What they demand is “only” a better balance between the emphases on different scales: “localization does not mean everything being produced locally, nor does it mean an end to trade. It simply means creating a better balance between local, regional, national and international markets. […] Localization is not about isolating communities from other cultures, but about creating a new, sustainable and equitable basis on which they can interact” (Norberg-Hodge and Mayo in Douthwaite 1996: ix).

Another common feature is the looseness of the spatial definition of “the local”. According to Hines (2000), it should be based on the type of goods or services produced14; for Norberg-Hodge et al. (2002), it depends on the social and ecological context,15 and Hopkins (2008: 143) explicitly suggests the example of a small town with its rural surroundings (in the British context the so-called market town) as an example of optimum scale.16 However, it is clear that any universal, generally accepted demarcation of “the local” does not exist. As Hopkins concludes, “There is no magic formula for the question of scale” (Hopkins, 2008: 144).

A Working Definition of Economic Localization

Based on the analysed authors' shared points and their systemization (see Table 2), we suggest the following working definition: economic localization is both the process and the result of moral, political and practical support of as many localized aspects of production and consumption as possible and desirable. More specifically, it includes preferring local factors of production, their local ownership, local capital flows and orientation primarily on satisfaction of local needs. Other integral aspects include emphasis on and support for sustainability of production and consumption, the development of local communities, democratic decision-making, strengthening local economies and self-reliance, and building relationships to place. Economic localization does not mean (attempts at) absolute autarky or any other type of isolation from the outside world.17


Here we raise the issue of constructing “the other”, which is currently discussed within the localization literature, match it with the results of our analysis and question the possible connections of economic localization to the research agenda of ecological economics. As already noted, we do not discuss the validity of particular localization arguments, but more general concerns relating to the whole concept.

A frequent issue, often critically discussed regarding localization, is the so-called defensive localism (e.g. Hinrichs, 2003; Winter, 2003b). These authors raise political considerations acknowledging that localization is in principle based on a distinction between “the local” and “the other”. In the words of Hinrichs (2003: 37), “defensive food system localization tends to stress the homogeneity and coherence of ‘local’, in patriotic opposition to heterogeneous and destabilizing outside forces, perhaps a global ‘other’ ”. In certain circumstances, localization can thus “become elitist and reactionary, appealing to narrow nativist sentiments”. We believe that, although this can be the case, on a general level it is not an inevitable outcome. As explained, for example, by Mouffe (2005: 15), the formation of any identity is always based on a difference from “the others”, but the relationship between us/them is not necessarily antagonistic. Of course, the practices of food system localization (and also of economic localization in general) are not black and white, but represent a variety of strategies, narratives, motivations and related identities, and so cannot be simply generalized (Winter 2003b; DuPuis and Goodman, 2005; Hinrichs, 2003; Born and Purcell, 2007; Smith and Jehlička, 2007).

What is interesting, though, is how the opposition is constructed by the localization authors, i.e. who is “the other” for them. Four of the authors analysed here (Hines, Hopkins, Douthwaite and Norberg-Hodge et al. – hereafter the “radical” strain) build a significant opposition between economic localization and the current socio-economic system characterized by the capitalist logic of industrialization and globalization. The subject of the critique is variably designated as the industrial economy (Douthwaite 1996), globalization (Hines 2000), economic globalization or the globalised oil-dependent infrastructure (Hopkins 2008), or more specifically in the case of food as the global food system (Norberg-Hodge et al., 2002).18 Such an approach is criticised by, for example, Hinrichs (2003: 34) as a “potentially problematic mode of binary thinking”, which presents localization simplistically as “the ‘solution’ to the ‘problem’ of globalization”. On the other hand, for Shuman and Desai/Riddlestone, such contrast is far less developed, which is consistent with the position of DuPuis and Goodman (2005: 368) who argue that “the presumption that localization intrinsically stands as a force against globalization seems, at best, naïve. In fact, […] localization most recently has been deployed to further a neoliberal form of global logic.”

We perceive this as an important question – whether and to what extent (a particular narrative of) economic localization can be seen as a form of opposition to the current socio-economic system as noted above. According to our interpretation, the localization narratives of the radical strain of the analysed authors form a significant opposition, an “alternative trajectory”, to the “hegemony of globalization” as mentioned in the Introduction. However, as also noted, there is a lack of theoretical background within the localization argumentation which would help us to clarify such questions. Hence, in the last part of the discussion, we would like to draw attention to the field of ecological economics as providing a possible theoretical background for the concept of economic localization, at least for its more radical strain.

Within ecological economics (EE), the issue of scale of economic production and consumption is one of the most important themes, one of those which actually distinguish and establish the field as a specific area of scientific inquiry (e.g. Spash, 1999; van den Bergh, 2001; Røpke, 2004, 2005). However, it is most often the global scale which is considered, in the sense of Daly's “optimal scale”, i.e. the optimal size of the whole economy within planetary limits (Daly, 1992, 1996; Daly and Farley, 2004). Some arguments regarding smaller scales – be they national, regional and/or local – of the organization and execution of economic activities also appear, but notably to a limited extent and more implicitly.

Van den Bergh (2001: 18–19) introduces the theme under the headline of “International trade and environment”, but limits himself to a disproval of the comparative advantage argument and a critique of the ecological footprint concept. Røpke (2005: 275) uses the category of “the scale and the resilience approach”, although on the sub-global level she talks only about regional applications of the different “calculations on nature”, for example material flow analysis and ecological footprint, and possible applications of the resilience concept. Spash's (1999) work is not as structured as the two previous texts as regards the main topics of EE; nevertheless, the sub-global scale is also missing in his text. It can be argued that when Daly and Farley (2004) talk about optimal scale, they link it with their other goals of effective allocation and just distribution, and thus the concern about the national, regional and local scale is also included. However, this we consider rather general and implicit.

In this respect, there is no direct connection or a strong line of research of economic localization within the research agenda of EE. However, if we consider the more general framework of EE, for example the priority of sustainability, emphasis on sustainable development both globally and within North/South relations, long-term focus, multidimensional evaluation and interest in local communities, which are some of the characteristics of EE specified by van den Bergh (2001: 16, table 1), there is a significant overlap with the main aims and principles of economic localisation as described in Table 1 here. Hence, in accordance with the normative approach in EE suggested by Røpke (2005: 262–263), and contributing to the question “In which direction should ecological economics be developed in the future?”, we suggest that a transition be made within EE from debating the negative aspects of globalization and international trade, to an explicit critical discussion of the concept of economic localization as their alternative.19 We also share the call for a “social ecological economics” as presented by Spash (1999: 22), i.e. for a deep interdisciplinary connection not only between ecology/science and economics, but also with other social disciplines such as sociology, social geography, political science, etc. We believe that building a stronger connection between the economic localization agenda (and especially its more radical strand) and the theoretical background and framework of EE would be mutually beneficial.


We present the results of a detailed analysis of six selected authors writing on the theme of economic localization. Their individual narratives structured according to six criteria (definition, main aim, main areas/issues, main actors, vision/ideal model, and main principles and/or policies) are summarized in Table 1 and described in the Introduction. Despite certain differences, all the analysed authors share a substantial part of their narratives and can be seen as representing a coherent stream of thought on economic localization. This allowed us to structure the particular dimensions and their concrete aspects of the shared meaning of economic localization in Table 2 (see Context and Methodology) and to suggest a common working definition of economic localization according to the analysed authors (Understanding Economic Localization). We hope that these results will be useful both as a possible analytical tool and as a point of departure for continuing theoretical discussions about economic localization. To develop the theory of economic localization further, we suggest first discussing and elaborating on a comprehensive definition and operationalization of the term (economic) localization, instead of focusing on partial arguments and issues.

In the Discussion, we raise one of the issues currently discussed within the localization literature, the construction of “the other”, as present also within the localization narratives of the analysed authors. We argue that although in particular cases localization can become defensive (Hinrichs, 2003; Winter, 2003b), on a general level this is not an inevitable outcome. As explained by, for example, Mouffe (2005: 15), the formation of identity is always based on differentiating from “the others”, but the relation between us and them is not necessarily antagonistic. On a more general level, we discuss the position of the concept of economic localization within the EE research agenda, and we argue that, in particular, the radical localization strain within the framework of EE is a worthy candidate for further development.


Work on this text was kindly supported by the specific research grant Environmental Aspects of Lifestyles II (MUNI/A/0872/2010) at the Faculty of Social Studies, Masaryk University. We are grateful to our colleagues from the Department of Environmental Studies, and to Petr Jehlička, Iago Otero, Francois Schneider and Pere Ariza, and above all to two anonymous referees for useful comments on previous versions of this paper.

  • 1

    For a more detailed description of historical connotations of the idea of economic localization, see Johanisova (2007: 38–48).

  • 2

    For an overview and description of many practical localization initiatives, see, for example, Douthwaite (1996) and Johanisova (2005).

  • 3

    The authors do not use the term economic localization, however; Hinrichs (2003) talks about localization, and Winter (2003a) discusses the term defensive localism. However, their concepts are relevant to what we call and define here as economic localization.

  • 4

    There is a localization/location theory within mainstream economics based on mainstream economic assumptions, which are often accepted also by economic and regional geography and other fields of research (see, for example, Aoyama et al., 2011: 75–84; Čadil, 2010). The authors analysed in this paper have a different understanding of the term (economic) localization, displaying various levels of opposition to mainstream economic assumptions and the socio-economic system based on them (see Discussion). Discussing the connections of our understanding of economic localization to this mainstream concept is beyond the limits of this paper. For a more thorough critical discussion of mainstream economic assumptions, including the problematic model of homo economicus, the identification of economic success with economic growth, and the gross underestimation of natural resources and energy as factors of production, see, for example, Schumacher (1993: Chapters 1–4, 7 and 8), Daly and Cobb (1990: 25–117) and Lutz (1999: 104–248).

  • 5

    There is one exception to this criterion: Norberg-Hodge et al. (2002) write specifically about the localization of the food production and consumption system.

  • 6

    For a more detailed explanation of the analytical process see Konopásek (2008). We followed the same process, but not using the Atlas.ti software discusses by Konopásek. For a theoretical overview of the development of the grounded theory approach see, for example, Kelle (2005).

  • 7

    The definition is a separate subject of section ‘A working definition of economic localization’.

  • 8

    The understanding and definition of the term community by the analysed authors is beyond the scope of this paper. For a comprehensive theoretical background to community studies see, for example, Day (2006). Certainly distinguishing between communities based on shared common interests, shared geographical areas (Parnell 1999: 57) and combinations thereof would be pertinent to such a definition.

  • 9

    Shuman literally declares in the foreword of his book that “I have written this book for anyone and everyone committed to reviving his, her, or their own community. […] Given my long-time association with progressive political causes, many readers will be surprised – and some annoyed – to find that I'm also a strong believer in economic growth, weak central government, private ownership, and the profit motive” (Shuman, 1998: xiii–xiv).

  • 10

    See their model and examples (Desai and Riddlestone, 2002: 65–66). On the other hand, they openly say it is necessary to cut consumption in the UK to one-third of the current level (p. 12), and they explicitly quote and promote Schumacher's concept of intermediate technology (p. 45).

  • 11

    It is beyond the scope of this paper to present and discuss the full line of argument used for and against economic localization, or to assess the validity of the particular arguments. We simply systematize the aspects of the argumentation to structure and operationalize the complexity of the issues involved.

  • 12

    The potentially negative outcomes of economic localization are introduced and discussed by the analysed authors disproportionately less than its benefits. The problematic aspects are often neglected, or mentioned and directly dismissed as marginal or misguided. For the most systematic overview of possible negatives and critical points of economic localization among the analysed authors, see Hines (2000: 242–245).

  • 13

    For example, Talberth et al. (2006: 2) recognize the following three dimensions: (a) localization of goods and services, (b) localization of economic decision-making, and (c) localization of the urban landscape (mentioned within the American context and problems related to suburbanization and urban sprawl).

  • 14

    “What constitutes the boundary for localisation will depend on what goods and services are being considered. This should reflect the views and the needs of the communities affected, but will ultimately, in terms of allocation of the necessary supportive resources, be a political decision by those countries and any regional blocs concerned” (Hines, 2000:30).

  • 15

    “What may be considered small can vary considerably from place to place, depending upon the ecological and social contexts. In some regions of the tropics, for example, small may mean less than an acre or two, while in the United States a farm could be 150 or more acres and still reasonably be considered small. The USDA [US Department of Agriculture] defines farm size by annual farm income, rather than by area” (Norberg-Hodge et al., 2002: 127).

  • 16

    Additionally, there have been attempts to designate the optimal scale for some particular types of goods and services (see New Economics Foundation, 2010: 60–62) or to determine the spatial dimensions of “the local” (New Economics Foundation, 2002).

  • 17

    The essence of this working definition does not differ significantly from the preliminary definition by Johanisova (2007) used at the selection stage when choosing the relevant literature for our analysis. Rather, it can be seen as another evolutionary stage of our understanding of the term economic localization which we now consider clearer and more condensed, as well as more embedded in the relevant literature, and thus perhaps ripe for public academic discussion and feedback.

  • 18

    According to Born and Purcell (2007: 205), neither industrialization nor globalization are adequate terms for describing the negative process the authors have in mind because they do not embody the fact that the process is also a capitalist one. To define the process precisely, “it is specifically the capitalist logics of industrialization (and its globalization strategy) that result in the negative effects cited by the research.” For this combination of factors they suggest the term capitalistization, although admitting that this is an ugly word (Born and Purcell, 2007: 205, 199).

  • 19

    Our suggestion can be seen as an analogy to what has happened within the long-term critical discussion about economic growth: since the very establishment of EE as a research field, the questioning of economic growth has been at its heart (see, for example, Spash, 1999; van den Bergh, 2001; Røpke, 2004, 2005). However, it has been less than a decade since more systemic attempts appeared to move the debate from a critique of growth to serious systemic thinking about de-growth (as discussed by, for example, Latouche, 2010; Schneider et al., 2010; Kallis, 2011).