Economic Management and Performance: A Comparative Evaluation
M. DONALD HANCOCK
As the preceding chapters reveal, approaches to economic management--including the use of different instruments of industrial policy--have varied over time. Throughout the postwar period, government leaders in the five nations have experimented with varying policy combinations in their attempt to promote economic growth under conditions of continuing globalization and domestic structural change. Policy choices and public expenditures on sectoral and regional adjustment have influenced patterns of national economic performance that in turn have affected efforts by political leaders, unions, and employers to achieve workplace reform (as will be discussed in the second section of this volume).
Industrial policies claim venerable historical roots, as Sabine Erbès- Seguin demonstrates in recounting the tradition of state-led economic development in France in Chapter 3. During the 1930s American and European governments introduced a variety of industrial support programs to reduce unemployment in the wake of the Great Depression.1 Wartime mobilization and the diffusion of Keynesian principles after 1945 brought an emphasis on macro-level economic activism throughout the Atlantic region. Early postwar British and French leaders initiated a highly interventionist approach to economic management in the form of selective nationalization and (in the latter case) indicative economic planning. European officials subsequently embraced industrial policy as an active supplement to more general fiscal and monetary measures in response partly to the recession of 1966-67 and partly to the resurgence of ideological conflict that prompted a new wave of government economic and social activism during the 1960s and early 1970s.
The initial enthusiasm for active sectoral and regional intervention spanned the ideological spectrum. Moderate left cabinets in Britain and Sweden, the Gaullist-dominated, center-right government in France, and West Germany's centrist grand coalition increased public expenditures on industrial and regional subsidies in a broadly similar fashion. The Johnson, Nixon-Ford, and Carter administrations embarked as well on a strategy of increased government economic activism during the 1960s and 1970s in the United States, albeit without an equivalent emphasis as that in Western Europe on targeted industrial policies (with the important exception of federal support for military research and development
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