Microstates And Subnational Regions: Mutual Industrial Policy Lessons

Abstract

Small nation-states and subnational regions share many similarities in terms of the challenges faced in implementing successful industrial policies. Globalization and the emergence of supranational organizations such as the European Union are also making the two sets of entities much more similar over time. This article argues that recent research advances are revealing that policy makers in small nations and regions can share important policy lessons. In particular, extensive recent research on industrial clusters, the determinants of economic growth, and new regional governance structures is generating a number of important policy lessons. The mutual lessons being exposed by this research suggest strategic policy stances for smaller nation-states and regions that significantly differ from those of larger countries and industrial giant regions.