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Industrial Policy and Local Economic Transformation: Evidence From the U.S. Rust Belt

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  • Ben Armstrong

Abstract

State and local governments frequently invest in policies aimed at stimulating the growth of new industries, but studies of industrial policy and related economic development initiatives cast doubt on their effectiveness. This article examines the role of state-level industrial policies in contributing to the different economic trajectories of two U.S. metro areas—Pittsburgh, Pennsylvania, and Cleveland, Ohio—as they adapted to the decline of their legacy industries. Comparative case studies show that industrial policies in Pittsburgh, which empowered research universities as local economic leaders, contributed to the transformation of the local economy. In Cleveland, by contrast, state industrial policies invested in making incremental improvements, particularly in legacy sectors. The article concludes that by empowering new local economic actors—such as universities—industrial policies can foment political change that enables structural economic change to follow.

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  • Ben Armstrong, 2021. "Industrial Policy and Local Economic Transformation: Evidence From the U.S. Rust Belt," Economic Development Quarterly, , vol. 35(3), pages 181-196, August.
    • Handle: RePEc:sae:ecdequ:v:35:y:2021:i:3:p:181-196
    DOI: 10.1177/08912424211022822
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    Cited by:

    1. Zongguo Ma & Xueai Fan & Yanli Zhang & Beibei Hu, 2023. "Understanding the Influencing Factors of Enterprise Transformation and Upgrading Capability: A Case Study of the National Innovation Demonstration Zones, China," Sustainability, MDPI, vol. 15(3), pages 1-25, February.
    2. Edward (Ned) Hill, 2021. "Development Starts With Historical Endowments: Industrial Policy and Leadership Are Catalysts," Economic Development Quarterly, , vol. 35(3), pages 202-215, August.
    3. Luisa Gagliardi & Enrico Moretti & Michel Serafinelli, 2023. "The World’s Rust Belts: The Heterogeneous Effects of Deindustrialization on 1,993 Cities in Six Countries," CESifo Working Paper Series 10826, CESifo.
    4. Gagliardi, Luisa & Moretti, Enrico & Serafinelli, Michel, 2023. "The World's Rust Belts: The Heterogeneous Effects of Deindustrialization on 1,993 Cities in Six Countries," IZA Discussion Papers 16648, Institute of Labor Economics (IZA).
    5. Ben Armstrong, 2021. "Would Pittsburgh Have Transformed Without State Intervention? A Response to Comments," Economic Development Quarterly, , vol. 35(3), pages 216-218, August.
    6. Dan Berglund, 2022. "Toward a More Complete and Nuanced Examination of Ohio and Pennsylvania’s 1980s Technology-Based Economic Development Strategies," Economic Development Quarterly, , vol. 36(1), pages 59-65, February.
    7. Luisa Gagliardi & Enrico Moretti & Michel Serafinelli, 2023. "The World’s Rust Belts: The Heterogeneous Effects of Deindustrialization on 1,993 Cities in Six Countries," Working Paper series 23-17, Rimini Centre for Economic Analysis.
    8. Sabina Deitrick & Christopher Briem, 2021. "The Pittsburgh Transition: Not Quite So Simple," Economic Development Quarterly, , vol. 35(3), pages 197-201, August.
    9. Franklin Obeng-Odoom, 2023. "Spatial political economy: the case of metropolitan industrial policy," Review of Evolutionary Political Economy, Springer, vol. 4(1), pages 137-163, April.

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