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New forms of industrial policy in the age of regulation: A comparison of electricity and telecommunications in Italy and Spain
Author(s) -
Bulfone Fabio
Publication year - 2020
Publication title -
governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.46
H-Index - 76
eISSN - 1468-0491
pISSN - 0952-1895
DOI - 10.1111/gove.12408
Subject(s) - internationalization , state ownership , government (linguistics) , shareholder , electricity , business , industrial policy , power (physics) , state (computer science) , industrial organization , market economy , economic system , economics , corporate governance , international trade , finance , emerging markets , linguistics , philosophy , physics , algorithm , quantum mechanics , computer science , electrical engineering , engineering
Relying on insights from the comparative capitalism debate, this article compares the industrial policy strategies implemented by the Italian and Spanish governments to favor the internationalization of domestic electricity and telecommunications incumbents. It is shown how the cross‐sectoral and cross‐country variation in the outcome of their industrial policy efforts—that is, successful or unsuccessful internationalization—is explained by the reciprocal power relationship between governments and domestic large shareholders (“blockholders”). Successful internationalization is conditional on the availability of two power resources the government can use to influence blockholders' behavior: ownership power and regulatory power. When these resources were available, governments were able to impose a stable ownership structure on national champions, leading to successful internationalization. When they were not available, ownership instability led to failure. The findings presented here contribute to the debate on new forms of state involvement in the economy in the neoliberal era.