Spatial political economy: the case of metropolitan industrial policy

Abstract

Industrial policy has become the focus of much more interest in recent times. Of particular note is mainstream economists’ fascination and their peculiar claims about how and why this new industrial policy promotes growth, redistribution, and sustainability. Such contentions warrant scrutiny. Using metropolitan data, plans, and laws, along with regional and national data from census and survey reports, this paper addresses three questions related to growth, inequality, and sustainability. On the basis of the evidence, collected and interpreted from the lens of original institutional economics, it is argued that industrial policy has been too strictly tied to (urban) economic growth which has not, contrary to expectations, led to ecologically sensitive and inclusive (urban) economic development. Instead, growth policies have cumulatively generated rising urban inequalities and ecological problems in cities and regions. This lack of congruence between the case for, and outcomes from, the pursuit of a particular type of industrial policy can be partly explained by the presence of absentee land ownership. Its entanglements with rent theft, profit seeking, and problematic engagement with persistent inequalities and unsustainability complement the explanation. A different industrial policy could seek to recoup socially-created, but privately appropriated, unearned income, reinvest this resulting revenue in ways that directly build state capacity, address persistent urban inequalities, attend to ecological challenges, and seek to create industries that avoid the problems of ‘progress and poverty’.

New perspectives and issues in industrial policy for sustainable development: from developmental and entrepreneurial to environmental state

“…As the not-so-optimistic example of France shows (Klebaner and Voy-Gillis 2022 ), the current industrial policy, rather than supporting energy transition, leads to a standstill due to its complexity and conflicting goals, tools, and stakeholders. Furthermore, as Ghana’s Sekondi–Takoradi case shows, the growth-centered industrial policy without local ownership has not generated the expected results in terms of urban inclusion and environmental protection (Obeng-Odoom 2022 ).…”

“…Critics of industrial policy argue that it tends to be overly focused on economic growth objectives to the detriment of environmentally sensitive and socially inclusive spatial economic development. Obeng-Odoom ( 2022 ) addresses this issue in the context of rising urban inequalities and ecological problems affecting cities and regions. According to him, a well-designed industrial policy should enable the recovery of unearned revenues that have been socially created but privately appropriated by an absentee class abroad.…”

“…This principle can also be applicable in assessing other cases treated in the special issue. For instance, the problematic case of urban development driven by the oil industry in Ghana can be criticized in terms of the lack of local ownership of oil resources and production, which has led to all profits being monopolized by the absentee class or foreign-based land/resource lords (Obeng-Odoom 2022 ). In comparison, the mixed success and the constrained growth of three cases of industrial symbiosis in Uganda (Buda and Ricz 2023 ) can be attributed to the lack of effective carrots (pro-active support by the government) whereas they are exposed to discipline from market competition (sticks).…”

State-Level Urban Agglomeration and Enterprise Innovation: A Quasi-Natural Experiment

“…In the transitional period when China's economy is changing from high-speed growth to high-quality development, it is of great importance to clarify the relationship between urban agglomeration construction and enterprise innovation, and to accurately evaluate the implementation effect of the policy "state-level urban agglomeration establishment" in promoting the R&D investment and innovation output of enterprises. This is not only beneficial to enrich the theory of spatial political economy [3], but also to construct the analysis framework and internal logic of the linkage between urban agglomeration construction and enterprise innovation, which has certain enlightenment to future regional high-quality development.…”