The Politics of Institutional Renovation and Economic Upgrading: Lessons from the Argentine Wine Industry

Gerald Mc Dermott ()

No 817, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Through a comparative, longitudinal analysis of the wine industry in two Argentine provinces, this article examines how different political approaches to reform shape the ability of societies to build new institutions for economic upgrading. The article finds that inherited structural factors per se can not easily explain the different solutions to this challenge. A better explanation focuses on how governments confront the dual challenge of redefining the boundary between the public and private domains and of recombining the socio-economic ties among relevant firms and their respective business associations. A “depoliticization” approach emphasizes the imposition of arm’s-length incentives by a powerful, insulated government, but appears to contribute little to institutional change and upgrading. A “participatory restructuring” approach promotes the creation of public-private institutions via adherence to two key principles: a) inclusion of a wide variety of relevant stakeholder groups and b) rules of deliberative governance that promote collective problem-solving. This latter approach appears to have the advantage of facilitating collaboration and knowledge creation among previously antagonistic groups, including government.

Keywords: institutions; networks; upgrading; Latin America; industrial policy (search for similar items in EconPapers)
JEL-codes: D8 F23 H4 L1 L5 M13 O1 P16 (search for similar items in EconPapers)
Pages: pages
Date: 2005-12-01
New Economics Papers: this item is included in nep-pke and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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