Designing Industrial Policy in Latin America ─ Business-State Relations and the New Developmentalism

What makes for effective cooperation between government and business in designing industrial policy? Core research questions on the institutional design of optimal arrangements focus on three main functions: 1) maximizing the benefits of information exchange; 2) motivating participation through authoritative allocation; and 3) minimizing unproductive rent seeking. The book analyses these functions theoretically and empirically in a range of recent experiences in Latin America. Across the region, countries with more positive experiences of public-private collaboration tend to have more pragmatic governments and better organized and informally networked private sectors. Effective cooperation also depends on the macro context, in particular the nature of the political system and the alternative avenues it provides for business influence, especially through parties, networks and appointments, the media, and campaign finance. Lastly, the structure and strategies of big domestic businesses - mostly diversified, family-owned business groups - affects their preferences and interest in collaborating in industrial policy.

Ben Ross Schneider is Ford International Professor of Political Science at MIT. He taught previously at Princeton University and Northwestern University. Recent books include Business Politics and the State in 20th Century Latin America and Hierarchical Capitalism in Latin America: Business, Labor, and the Challenges of Equitable Development (both with Cambridge University Press).