With so many states committed to economic transformation and experts ready to provide technical advice on how to accomplish it, why are outcomes so mixed? In Pursuit of Prosperity examines the process of upgrading—moving to more valuable activities in production, improving technology, knowledge, and skills, and participating in global value chains—and develops a new theory to explain the form and success of national policies designed to promote it. 

With a mixed-methods approach, Charles R. Hankla draws upon archival research and interviews from postwar France and post-independence India as well as quantitative models of the outcomes in sixteen countries across six decades. He finds that the politics of a state affects its ability to improve their economy. When the state and private sectors are aligned in their institutional structures, which happens more commonly in corporatist and pluralist systems, industrial policy tends to be more effective. It is when the state or the private sector independently dominates industrial policy that poor outcomes are most likely. Rather than being fixed characteristics of countries, In Pursuit of Prosperity shows that policymaking styles vary across time and across sectors of the economy, reflecting the changing power dynamics and organizational resources of state and private actors. In doing so, the book sheds light on how industrial policy—which is experiencing a comeback in the United States and beyond—can best be harnessed for upgrading. It offers a valuable contribution to our understanding of the complex relationship between state politics and economic performance in the modern globalized context.

Charles R. Hankla is Professor of Political Science and Director of the International Center for Public Policy at Georgia State University.