Industrial Policy Among Developed Economies: the Political Economy of Structural Adjustment.

The economic malaise that characterized the 1970s has brought issues of comparative industrial policy to the forefront of attention among industrialized states. When economies stagnate, disruptions caused by import penetration can not be countered with growth in other industries or products. As a result, governments have become increasingly active in supporting exports and restricting access to domestic markets. Additionally, the 1970s saw the growth of the newly industrializing countries, which pose competitive challenges to industrialized states in many industries, including steel, textiles, shipbuilding, autos, and consumer electronics. This research explores the political economy of import-induced structural adjustment in developed economies. When imports grow at the expense of domestic producers, four actors in the polity will be concerned with the economic problems that result: the government, the firm, the labor organizations, and the financial institutions. Each actor has a distinct preferred industrial structure. The government and the financial institutions will prefer that the threatened industry adjust its structure to successfully compete with imports. Firms and labor organizations will prefer a return to the old industrial structure, via trade restriction or subsidization. Which actor or group of actors prevails in industrial policy bargaining is hypothesized to depend upon which actor or group of actors wields the most power in the bargaining. Power in industrial policy bargaining is hypothesized to consist of three elements: the traditional role the actor has played in the society, the flexibility and continuity of the actor's bargaining position, and the relative size or influence of the actor in the nation's political economy today. These hypotheses are tested using structured, focused comparison in three cases: the British steel industry, the West German electronics industry, and the US auto industry. In each case, specific firms were identified for intensive analysis. Results suggest that the key element of industrial policy bargaining power is the traditional role that the actor has played in the nation's political economy. Equally important were certain key events and individuals whose outcomes and decisions often altered the expected outcome. Conclusions are then offered suggesting the likely impacts of structural adjustments for the international division of production.Ph.D.International lawUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/160339/1/8502844.pd