Economic marginalization and community capacity: How does industry closure in a small town affect perceptions of place?

Neoliberal economic reform has undermined industries in rural and ‘blue collar’ towns exacerbating uneven development and population decline. In response to calls to examine the variegated and often conflicting experiences of neoliberalism, we interrogate the community effects of industry closure in a small town in the South Island of New Zealand. Adopting a mixed methods study, qualitative interviews with affected residents describe decades of economic decline culminating in job loss from the remaining major employer. Job losses compromised a sense of shared identity and social interaction in a town where declining amenities provided few opportunities to practice incidental, public forms of citizenship. Analysis of the survey data indicated that one year on from the partial-closure of the major industry, a statistically significant, relative decline in community capacity was observed in the study community. This research provides evidence that a community's confidence in their self-management is directly impacted by economic context. This is the first study we are aware of that has (a) quantified changes in community capacity over time and (b) identified that industry decline has had a short-term, negative effect on community capacity. These findings suggest the devolution of governance to the local level may be less effective in times of economic flux.