DEFINITION of 'Staple Thesis'

A theory of economic growth that emphasizes the role traditional commodities, or staples, play in the shaping of a resource-rich economy. The staple thesis was created by Canadian economic historian Harold Innis and economist W.A Mackintosh as an explanation for how the pattern of settlement and economic development of Canada was influenced by the exploitation and export of natural resources. Though its original purpose was to model Canada's historical economic evolution, the staple thesis can be applied to any country with a successful, export-heavy economy.

BREAKING DOWN 'Staple Thesis'

The staple thesis factors the extraction of natural resources into several areas of economic development. Historically, an example can be derived from the fishing industry: an increase in the demand for fish subsequently increases demand for the construction of fishing ships. In contemporary times, another example would be the influence of the petroleum industry on economic growth in a country that exports oil. An increase in demand for oil exports influences the development of infrastructure, technological innovation and human capital.

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