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Can Latin American Firms Compete?$
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Robert Grosse and Luiz F. Mesquita

Print publication date: 2007

Print ISBN-13: 9780199233755

Published to Oxford Scholarship Online: January 2008

DOI: 10.1093/acprof:oso/9780199233755.001.0001

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The Politics of Institutional Renovation and Economic Upgrading: Lessons from the Argentinian Wine Industry

The Politics of Institutional Renovation and Economic Upgrading: Lessons from the Argentinian Wine Industry

Chapter:
(p.81) 5 The Politics of Institutional Renovation and Economic Upgrading: Lessons from the Argentinian Wine Industry
Source:
Can Latin American Firms Compete?
Author(s):

Gerald A. McDermott

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199233755.003.0005

Through a comparative, longitudinal analysis of the wine industry in two Argentine provinces, this chapter examines how different political approaches to reform shapes the ability of societies to build new institutions for economic upgrading. Upgrading in wine and grapes often demands the creation of skills and the coordination of experiments in processes, products, and functions across a wide variety of organizational forms and sub-regions. Inherited structural factors per se can not easily explain the different solutions to this challenge. In particular, although voluntary associationalism improves the needed social learning and collaboration, it is also self-limiting. A better explanation focuses on how governments confront the dual challenge of redefining the boundary between the public and private domains, and of recombining the socio-economic ties among relevant firms and their respective business associations. A ‘depoliticization’ approach emphasizes the imposition of arm's-length incentives by a powerful, insulated government, but appears to contribute little to institutional change and upgrading. A ‘participatory restructuring’ approach promotes the creation of public-private institutions via adherence to two key principles: inclusion of a wide variety of relevant stakeholder groups, and rules of deliberative governance that promote collective problem-solving. The latter approach appears to have the advantage of facilitating collaboration and knowledge creation among previously antagonistic groups, including government.

Keywords:   Argentina, wine industry, collaboration, depoliticization, insulated government, knowledge creation

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