Governing Subnational Economies

  • Theodore Kahn
Part of the Latin American Political Economy book series (LAPE)


The wave of economic and political transitions across the developing world in the 1980s and 1990s led to divergent outcomes within countries. This chapter reviews the literature on subnational variation in response to national-level economic and political reform and argues that existing research has not fully applied the lens of government-business relations to analyzing economic outcomes at the subnational level. While differences in the pattern of interactions between local authorities and firms are clearly relevant to subnational economic performance, the mechanisms are likely to differ from those at the national level. To underscore this point, this chapter proposes a set of analytical guidelines for understanding subnational government-business relations. The chapter then introduces the book’s argument, which shows how the decisions of large firms shaped the organization of the local private sector in Puebla and Querétaro, leading to different patterns of government-business relations (sometimes also including labor) and, consequently, economic divergence.


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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Theodore Kahn
    • 1
  1. 1.School of Advanced International StudiesJohns Hopkins UniversityWashington, DCUSA

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