In Pursuit of Prosperity: Industrial Policy and the Politics of Economic Upgrading

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In Pursuit of Prosperity: Industrial Policy and the Politics of Economic Upgrading

by Charles R Hankla

University of Michigan Press, 2025

ISBNs

Cloth: 978-0-472-07746-5

Paper: 978-0-472-05746-7

eISBN: 978-0-472-90505-8 (OA)

About the Book

With so many states committed to economic transformation, and so many experts ready to provide technical advice on how to achieve it, why does progress so often remain elusive? In Pursuit of Prosperity examines the process of economic 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.

Using a mixed-methods approach, Charles R. Hankla draws upon archival research and interviews from France and India as well as quantitative models of sixteen countries across six decades. He finds that when state and private actors are aligned in their institutional structures, which can happen in both 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. As In Pursuit of Prosperity shows, rather than being fixed characteristics of countries, policymaking styles vary across time and across sectors of the economy, reflecting the changing power dynamics and organizational resources of stakeholders. 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 world.

About the Author

Charles R. Hankla is Professor of Political Science at Georgia State University and Director of the International Center for Public Policy, part of the university's Public Finance Research Cluster.

Reviews

“In Pursuit of Prosperity should be required reading for teaching and research on Comparative Politics and/or economic development, especially dealing with Western Europe or South Asia. I predict it will be highly cited by scholars. Charles Hankla is well respected in his field. He has a reputation for putting out stellar research, and this book does not disappoint.”— Mark Zachary Taylor, Georgia Institute of Technology

How do nations move up the economic value chain? In In Pursuit of Prosperity: Industrial Policy and the Politics of Economic Upgrading, Hankla delivers a groundbreaking analysis of how governments foster economic transformation using industrial policy. Drawing on a mix of historical case studies—from postwar France to modern India—alongside cutting-edge quantitative research, Hankla unpacks the political dynamics between state institutions and private actors that shape policy success. Essential reading for anyone interested in the future of global economic development.

— Stephanie Rickard, London School of Economics

Economic upgrading—sustainably shifting the output mix to higher value-added sectors—is something every country wants but only a few, such as Malaysia and Vietnam, achieve and many (Nigeria, Egypt...) have found elusive. This book provides a refreshing change from the usual discussion about the 'right' policies to achieve economic upgrading and looks at the public and private institutions that govern the outcomes. In particular, Hankla suggests that the balance of power between the public and private coalitions is critical. Drawing on case studies of France and India, he shows that when one coalition is dominant, elite capture or state dysfunction undermines the project. Reminiscent of Acemoglu and Robinson's Narrow Corridor, this idea of balance will be useful in designing upgrading strategies in two important groups of countries: resource-rich countries looking to diversify; and fragile states caught in repeated cycles of violence.

— Shantayanan Devarajan, Georgetown University