Planning for a Resource-Rich Region: The Case of Alaska

A model has been developed to estimate the regional economic impacts of resource development and to evaluate the regional policies designed to deal with these impacts. An Alaskan model is utilized, as that state's petroleum resources are developed to meet the country's energy needs. Fluctuations in the regional economy are accentuated by surges in local and state spending during development boom periods. This activity eventually leads to fiscal difficulties. An effective policy strategy would be for state and local government expenditures to grow at a steady rate based on long-run projections of revenues. Individual economic well-being cannot be increased by using revenues from resource developments to reduce personal income taxes. The gains in disposable income per capita are dissipated by induced immigration.