A comparative analysis of regional
industrial policy between Chile and
Italy
RSAI, November 16-2010
Nicolás Garrido
Enrico Zaninotto
Universidad Católica del Norte
Departamento de Economía –
Núcleo Milenio en Ciencia Regional y Políticas
Públicas
Chile
Università di Trento - CIFREM
Italia
Motivation and Revision
• More or less Industrial Policy? D. Rodrik (2007)
• Constraints
– Public sector has less information about the real
constraints for diversification than privates
– Industrial Policy is open to rent-seeking
• P. Evans (1995) Embedded Autonomy
• Weber (1968), Gerschenkron (1962) y Hirschman
(1958)
• Motivation
– How can we analyze Industrial Policies? Comparation?
– To identify an institutional framework to compare
territorial industrial policies
Comparing Institutions
• An institution is a set of rules or norms than
regulate the behavior of society
• Comparative Institutional Analysis, as a
fraemork to analyze the different structures of
national economies
– H. Simon (1978)
– Mashiko Aoki (2000)
– R. Boyer (2004)
– Williamson (1993) y North (1990)
Framework for Institutional Analysis
Embeddedness, or Social or Cultural Foundation
Informal Institutions, customs,
traditions, social norms
Spontaneous - Emergent
Basic Institutional Environment
Formal Rules of the Game (Property Right, Political
System, Laws, courts, money, federal governments)
Evolutionary process: Get the
environment right
Governance (the play of the game)
Align governance structure with
transactions
Get the governance structure right
Resource Allocation and Employment
Price and Quantities
Get the marginal conditions right!
Framework for Institutional Analysis
Embeddedness, or Social or Cultural Foundation
Informal Institutions, customs,
traditions, social norms
Spontaneous - Emergent
Basic Institutional Environment
Formal Rules of the Game (Property Right, Political
System, Laws, courts, money, federal governments)
Evolutionary process: Get the
environment right
Governance (the play of the game)
Align governance structure with
transactions
Get the governance structure right
Resource Allocation and Employment
Price and Quantities
Get the marginal conditions right!
Two Industrial Policies
Programs for Competitiveness
Improvement (06/2006)
Territorial Agreements (1998) or
Territorial Pacts
•
• Is an instrument available for
all the economic agents of a
territory to individualize and to
make specific projects
• Goal: to execute programs for
local development with high
participation and sustainability
•
Identification of competitiviness
gaps or constraints in a cluster to
design initiatives leaded by private
firms through participatives and
bottom-up techniques
Goal: To contribute in the
enhancement of the competitive
capacities of the Chilean regions,
making stronger the regional skills
for designing and implementing
territorial programs for improving
the productivity of Small and
Medium Firms in the clusters and
to improve equity for backward
sectors
– Subsidiarity Principle
– Integrate capital incentivation
with infraestructure
interventions
Ministerial Comitee
Strategic-Politic
National Services
Comitee
Local Level
Regional Level
National Level
Context of RDAs and PCIs
CORFO
Technical Unit of
Coordination
Support Units in
CORFO
Regional
Development
Agencies
Local Governance of
Clusters
Benefited Firms
How the PCIs are proposed?
1. RDA, defines three strategic clusters within each
region
2. Diagnostic of the problems of the cluster
involving the participation of multiple agents
–
–
Participation of private firms
Three axes of work: regional dynamic, productive
development of the firms and market access
3. To build a shared vision among all the agents
about where the cluster should go
4. To develop an action plan with broad agreement
How the TAs are proposed?
1. The proposal for development of a territory
presented by the involved subjects
2. The local state evaluates the coherence of
the proposal
3. The concertazion table is called
4. Subscription to the pact, and the responsable
subjects are presented
5. The Agreement is approved by the Local
Government
Local Governance of PMCs
• Directory integrated by
business local
managers, business
associations, public
agencies
• All the stackeholders
sign an Adhesion Act
Local
Manager
Directory
Executives
Executives
Local Governance of TAs
• In the concertazion table, private and public subjects
agree on the pact according to their interests
– The partnership is developed here
– Difference between formal and informal agreements!
• The agreement is signed with a contract where every
agent assume specific activities
• The responsable of the project has to follow the
development of the project
• Each Region has two local structure available
– Internal structure, of Politic and Burocratic support
– External structure, selected by the TA, for technical
support
Basic Simple facts on both programs
PICs
• 45 PICs with three in each
region
• Product specific PICs to the
South
• Sectoral specific PICs to the
North
Territorial Agreements
• 210 TAs
• 120 not activated
• 74 have spent less than 30%
• 16 have spent more than
30% of the activities
• Good Results
– Infraestructure investment
– Change of Local Expectations
Preliminary Thoughts
• A Caveat: lack of information to make an
efficiency comparation
• PICs top-down vs. TPs bottom-up
• The PICs design, seems to be better tailored
for productive development
• TPs are more open to innovations
• Role of Leadership and Partnership in the
governance
Cráter del Volcan Lascar 5300 mts.
en Cordillera de los Andes Chilena
Regional Clusters (Chile)