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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.

Suggested Citation

  • Gerald Mc Dermott, 2005. "The Politics of Institutional Renovation and Economic Upgrading: Lessons from the Argentine Wine Industry," William Davidson Institute Working Papers Series 817, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2005-817
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    References listed on IDEAS

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    More about this item

    Keywords

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

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H4 - Public Economics - - Publicly Provided Goods
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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