ABSTRACTIn this paper a paradigm for the dynamics of long‐run structural change in specialised and relatively nondiversitied regions is presented. My claim is that the present deterioration in economic performance of these regions results from the limits of the model of industrial development that casts interregional transportation in the lead role. I argue that improved relative efficiency in interregional transportation may result in prohibitively high transportation costs in the long run, due to the absence of intermodal competition in the transport sector, the prevalence of highly specialised operations and an investment bias towards the original export sector. This will inhibit and indefinitely delay an economy's potential for a take off from a “vinous circle” and a boom and bust development. I outline further a conceptual approach to treating transportation costs and regional change by raising regional resource mobility via coordinated investments in intraregional transport