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You are here: Home / Lessons Learned / Institutions for Effective Business-Government Collaboration: Micro-Mechanisms and Macro Politics in Latin America

Institutions for Effective Business-Government Collaboration: Micro-Mechanisms and Macro Politics in Latin America

This papers looks at what makes for effective cooperation between government and business in industrial policy. Core research questions on the institutional design of arrangements for business-government interactions focus on three main functions: i) maximizing the benefits of dialogue and information exchange; ii) motivating participation through authoritative allocation; and iii) minimizing unproductive rent seeking.

Countries with more experiences of public-private collaboration (PPC) 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 politicking, 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, Inter-American Development Bank Working Paper series IDB-WP-418 (2013)

    In Latin America, ongoing development, globalization, and integration into the international economy have rendered the challenges of state intervention into the private economy through industrial policy more complex, delicate, and information intensive.

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