Shifting States in Global Markets

Subnational Industrial Policy in Contemporary Brazil and Spain

By (author) Alfred P. Montero

Paperback - £33.95

Publication date:

15 July 2002

Length of book:

272 pages


Penn State University Press

ISBN-13: 9780271025292

Shifting States in Global Markets contributes to the debates over the political economy of globalization by focusing attention on the increasingly important role of subnational governments in implementing economic policies. Challenging the view that the effects of decentralization are positive or negative uniformly and can be explained by reference to the influence of national political institutions, Alfred Montero uses his comparisons of industrial policy in Brazil and Spain, and between different regions in these countries, to argue that we need to pay attention to political conditions at the subnational level to account for the variation in economic success between regions.

Two crucial conditions are emphasized in Montero’s analysis: how much competition there is among political elites within any region, and how much competition there is between regions for scarce fiscal resources. Lower competition among elites leads to subnational governments delegating more autonomy to public agencies to develop ties with private businesses favoring allocative efficiency and innovation; higher competition between regions provides incentives for political leaders to support involvement in economic development efforts by a greater variety of public agencies, whose cooperation and mutual trust over time create the conditions for long-term success in these efforts. This analysis gives us a much more nuanced understanding of how countries are experiencing the challenges of globalization today.

“This book contributes to the new literature on the economic responses of subnational governments to the pressures of global integration. Through carefully researched comparative studies of regional governments in Brazil and Spain, Montero offers an original explanation for the varying capacities of governments to form the cooperative ties with private producers essential for conducting effective industrial policy. In a highly complex and deeply subtle argument, the author demonstrates how interregional and intraregional competitions influence the willingness of politicians to delegate the authority competent bureaucrats need to foster local economic development. An inspired combination of informed theory and methodological sophistication makes this book a model of how to do comparative politics.”

—Eliza Willis, Grinnell College