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

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  • Gerald Mc Dermott

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    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.

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    Bibliographic Info

    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 817.

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    Length: pages
    Date of creation: 01 Dec 2005
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    Handle: RePEc:wdi:papers:2005-817

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    Keywords: institutions; networks; upgrading; Latin America; industrial policy;

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    1. Elisa Giuliani & Carlo Pietrobelli & Roberta Rabellotti, 2004. "Upgrading in global value chains: lessons from latin american clusters," Working Papers 72, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    2. John Paul MacDuffie, 1997. "The Road to "Root Cause": Shop-Floor Problem-Solving at Three Auto Assembly Plants," Management Science, INFORMS, vol. 43(4), pages 479-502, April.
    3. Sabel, Charles F., 1996. "A measure of federalism: assessing manufacturing technology centers," Research Policy, Elsevier, vol. 25(2), pages 281-307, March.
    4. Doner, Richard F. & Ritchie, Bryan K. & Slater, Dan, 2005. "Systemic Vulnerability and the Origins of Developmental States: Northeast and Southeast Asia in Comparative Perspective," International Organization, Cambridge University Press, vol. 59(02), pages 327-361, April.
    5. Helper, Susan & MacDuffie, John Paul & Sabel, Charles, 2000. "Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism," Industrial and Corporate Change, Oxford University Press, vol. 9(3), pages 443-87, September.
    6. Ostrom, Elinor, 1995. "Self-organization and Social Capital," Industrial and Corporate Change, Oxford University Press, vol. 4(1), pages 131-59.
    7. Pack, Howard, 2000. "Industrial Policy: Growth Elixir or Poison?," World Bank Research Observer, World Bank Group, vol. 15(1), pages 47-67, February.
    8. Doner Richard F. & Schneider Ben Ross, 2000. "Business Associations and Economic Development: Why Some Associations Contribute More Than Others," Business and Politics, De Gruyter, vol. 2(3), pages 1-29, December.
    9. Giuliani, Elisa & Bell, Martin, 2005. "The micro-determinants of meso-level learning and innovation: evidence from a Chilean wine cluster," Research Policy, Elsevier, vol. 34(1), pages 47-68, February.
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