As Rural Development assumes a greater importance in European policy, one strategy to stimulate economic activity across a broad range of sectors is to use small towns as a focal point for economic development. This may be particularly relevant in the UK where there is increasing concern over the future vitality and viability of these towns. However, such a strategy rests on the assumption that there is a strong level of interdependence between small towns and their surrounding areas. While their historical legacy suggests close integration, developments in the wider economy and resultant socio-economic restructuring have undermined the traditional functions of small towns and may have severed many of these local linkages. Methodologies are developed to measure the size and spatial distribution of economic linkages in and around two small towns in rural England; one located in the 'remote' area of South Devon, and one in more 'accessible' Buckinghamshire. Results from two validation exercises indicate that self-completion methods are a useful means of obtaining spatial economic data from producers and consumers. Analysis compares the degree of economic integration of the towns into their respective local economies, and identifies key characteristics of firms and households that are good predictors of strong local integration. Results show that the strength of local economic integration is a function of economic and demographic structure as well as proximity to urban centres. This illustrates that the functional role of small towns in the economy is a more useful criterion on which to base policy recommendations than is demographic size. The town in the 'remote' rural area is found to be more strongly integrated into its locality than the town in the 'accessible' area; indicating that benefits of intervention are more likely to 'trickle out' into the surrounding area in the former case. Further, the minimal role of agriculture in the local economy implies that traditional measures of farm support are no longer likely to provide a valuable method of supporting rural communities. A useful area for subsequent enquiry would be to employ an 'integration index' to develop settlement typologies so that more generalisations can be made to aid the process of policy formulation.

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