Since the financial economic crises of the early 1970s the debate about economic and industrial affairs has intensified everywhere with, in many countries,the focus of economic policy shifting from demand to supply side remedies. What is striking about the post-1974 pattern is the extent to which countries have diverged in economic performance. The results of attempts to explain these differences are contradictory both between and within academic disciplines, though there is general agreement that the microeconomic policies of government can, and in most cases have, affected economic performance. The objectives of the papers in this special issue are (1)to describe the nature of the industrial policy agenda in each country; (2) to describe the instruments available and the scale of assistance provided to industry directly or indirectly; (3) to provide an outline of the institutional and political context in which policy is formulated in each country. Three broad comparative conclusions can be drawn: (1) we should not be too dogmatic about inferring the preconditions (e.g. type of party competition or bureaucratic structure) for apparently ‘successful’ policies; (2) the pursuit of a coherent industrial strategy appears to depend on socio/political condition which have been present in some countries but absent in others, such as a broad acceptance among political elites on the need to play an active part in helping industry to adapt to change and the existence of good communications between political/bureaucratic and economic actors, including a broad acceptance by private investors of the need for government intervention ; (3) even in countries which meet these conditions, particular industrial strategies change over time, sometimes dramatically, though this suggests that these countries have a greater capacity to adapt to change, particularly in response to external events, than countries characterised by policy inertia or policy confusion.

Threats to effective policy-making arising from ubiquitous circumstances of complexity and uncertainty are often taken as reasons to eschew both the attacking of social problems through public policy and cogitation, such as policy analysis, in the policy process. It is suggested here that, as complexity and uncertainty increase, more cogitation is required, not less; but it is crucial that cogitation be of the appropriate sort. Greater use should be made of policy design, as opposed to methods emphasising selection among prespecified alternatives. The required design task varies with the level of difficulty – defined by complexity, uncertainty, and lack of feedback – in any case at hand. A taxonomy of levels of difficulty is developed, together with a preliminary outline of the design task required at each level.

Fiscally pressured local governments face the same basic choices in both the United States and the United Kingdom: whether to increase locally raised revenues in order to maintain existing services or to reduce local services. The article first posits a model of local government decision-making in response to fiscal pressure drawn primarily from organizational and systems theory. Local governments are viewed as organizations concerned with maintaining their equilibrium relationships with their external environment (public employees and their unions). The model suggests a series of hypotheses about how local government will respond to fiscal pressure. Case studies of fiscally pressured local governments in both the United States and the United Kingdom are then utilized to describe actual local responses and to assess the usefulness of the model. The article concludes by setting forth a rough hierarchy of preferred local responses.

Public agencies and public employees are increasingly berated as inept and inefficient. We argue that the public bureaucracy in the United States is more valuable and effective than generally recognized. Where public agencies do perform badly, the problem is often due to external factors. We discuss the oversimplified calls for more businesslike efficiency in government, the value complexity which complicates evaluation of the public bureaucracy, and the higher standards imposed on the public sector. We also discuss the challenges imposed on public agencies by special interest politics, an overload of highly complex assignments, and adverse public stereotypes. The danger of overlooking these issues is that we will continue to have a huge, active public sector, and decisions about its role and management must not be determined by oversimplification and stereotype.

This paper explores the complexities and ambiguities of the relationship between the state and business associations by examining the case of West Germany. While business associations continue to lobby the state on behalf of their members, they perform a number of other roles. Association staff often provide information and expert advice to the state. The state can lend associations organisational support by setting rules of political influence that are favourable to them. Business associations become involved in the formulation and even implementation of what are effectively public policy functions, though associations have a ambivalent attitude, preferring both autonomy from the state and influence. Business associations may fend off attempts by the state to subject their members' behaviour to legal regulation by offering self-regulation with state approval; however, this can critically affect relations between associations and their members. Devolution of public authority to business associations is resorted to pragmatically, or opportunistically, by both associations and the state as an expedient solution to individual problems. This arises because associations lack a consistent theory defining their status in relation to the state.

The ability to forecast and evaluate the impact of selective financial assistance is crucial to the formulation of effective policies of selective industrial intervention. A survey of institutions and methodology across the three countries reveals inadequacies in the quality and the extent of governments’ appraisal of industrial assistance measures. The principal problems of quantitative appraisal are identified and discussed and suggestions are made for improvements in the procedures and methods of appraisal, with the purpose of improving the formulation and the implementation of policies of selective industrial assistance.

At each stage of program implementation – strategic planning, systems design, development of the management control infrastructure, and project execution – different types of expertise are most critical to success. The civil service system, which is oriented toward the hiring of permanent employees, and personnel ceilings, which are often arbitrarily set in the budgeting process, interact to impede the transition from one implementation stage to the next. Cost overruns and long-run schedule slippage may result from attempts to expedite programs by beginning implementation stages in parallel, particularly if compensatory resources are not provided. These problems are illustrated with the history of the implementation of the strategic petroleum reserve program, a key element of US policy for reducing vulnerability to disruptions of the world oil market.

The structural weaknesses of the UK industrial economy are discussed and it is argued that the policy response does not match the scale of the crisis. Whether there should be an industrial policy is politically contentious. Aid has been directed towards the declining sections of manufacturing industry. Policy adaptation has been ad hoc and decision-making on industrial policy and programme administration is fragmented. Reform is difficult because of genuine policy disagreements between the main political parties, the inherent tendency to return to cautious middle-ground policies defined by the bureaucracy and the persistence of a laissez-faire tradition that leads to an institutional isolation of business and government. The unsatisfactory nature of British industrial policy is related to factors deeply embedded in the political system and a pessimistic view is taken of the possibility of profound change.

This article relates two developing themes in planning theory and practice in government: the proliferation in recent years in Britain of policy planning systems and the concern in a number of countries with processes of implementation. The growth of policy planning systems can be analysed from a number of perspectives: (1) procedural planning theory; (2) interorganisational theory and (3) the theory of fiscal crisis. The paper discusses five major factors which shape the implementation process in relation to policy planning systems: (1) the policy message; (2) the multiplicity of agents; (3) perspectives and ideologies; (4) resources; (5) the politics of planning.

Important and controversial changes have recently taken place in industrial training in the United Kingdom. Training is a complex policy area – industrial, economic, educational and social objectives may be pursued through it. For the most part it has been policy formation which has been dominated by professionals and thus there has been a ‘closed system’ into which outsiders rarely intrude. But outside influences have become more powerful; consequently the professionals are careful about which issues they place on the agenda for discussion. However, the most striking impression made by the training system is its lack of coherence and this may undermine its effectiveness.

This paper explores the tension between social and commercial criteria and the importance of the nature of available information in influencing policymaking towards commercial or quasi-commercial activities such as transport undertakings. The importance of financial criteria as key indicators which influence railway policy is established by reference to significant landmarks in the corporate existence of British Rail. An underlying conflict between this information and the declared policies of successive governments is exposed. This reveals that, not only are policy-makers constrained by the difficulties of providing more appropriate information, but they are also the victims of their own reluctance to implement effectively policies which would actually improve existing sources of information.

In the context of declining relative output and productivity there have been increasing calls for the American government to play a greater role in industrial policy in recent years. Traditionally, however, US government intervention has been ad hoc and reactive rather than planned and strategic. Regulation policy has rarely been linked to economic growth, and most recently has evolved in a policy context separate from and largely antagonistic to business. Direct and indirect government aid is largely a result of the lobbying activities of diverse economic interests operating in an open but fragmented policy system. Of the various industrial policy options open to federal governments only one, facilitative or positive adjustment policy, is politically and ideologically possible. Even this, however, will be difficult to implement in a pluralistic and fragmented political system.

This study of flood control policy before and after the Chinese floods of 1980–2 reveals the interactive effects of bureaucratic politics, the goals and careers of national leaders, and natural disasters in a communist regime. Policy is shown to be more reactive and influenced by longstanding bureaucratic rivalries than most previous research has found.

Danish industrial policy reflects a ‘liberalistic’ paradigm, with industrial subsidies being general rather than selective, and based on profitability. There was an increase in the number of industrial policy instruments introduced in the second half of the 1970s, and in particular there seems to have been an increase in subsidies for technological innovation. The amount of money allocated for industrial subsidies has increased, especially during the economic recession. However, Danish industrial policy can only be conceived of as a crisis response policy in a relatively diffuse way, with only a few arrangements directly targetted at firms in difficulties, whereas most aim at making the surviving firms expand, innovate and increase their exports. Similarly, with few exceptions Danish industrial policy can be seen as anticipatory only in a very general way. The administration of industrial policy is characterised by close cooperation between state, industry and labour in tripartite boards and committees that take decisions about the administration of industrial policy or advise the government. The widespread use of such tripartite bodies hampers changes in industrial policy because all partners have to acquiesce in the changes. Innovation in Danish industrial policy is likely to be a gradual process, with most existing arrangements surviving, and a desultory increase in the use of more selective measures.

This paper examines policy planning systems in British central-local government relations, and in particular the formal, structured relationship in the local transport policy sector, as a means of exploring the impact in intergovernmental relations of the form of linkage between institutions. This impact is analysed in terms of central government's ability to use the planning system to promote policy processes and promote and regulate policy content in the locality. The use of specific and block grants by central government as a potential instrument of control in relation to policy planning systems is discussed. An examination of limiting cases reveals the importance of local resources in minimising central government influence through the policy planning system, and suggests that institutions will seek to restructure the form of linkage or underlying resources when they see themselves loosing advantage to others.

This article examines the patterns of policy change in the field of direct responses to unemployment in the UK. After discussing the nature of the policy area, the article proceeds to identify instances of policy innovation, persistence, succession and termination under the headings of Job Creation, Employment Subsidy, Training, and Youth. As this is a relatively new problem for British government there are several cases of policy innovation, but the most striking finding is of a high number of policy successions. Discussion is then focused upon the relevance of a range of factors which might explain the patterns of policy change deduced, suggesting that the most important of these have been (i) ‘symbolic pay offs’ of policy change; (ii) the in-built terminators in most special employment measures; (iii) the nature and strategic position of the unemployment policy community; (iv) changing cabinet objectives. It is concluded, despite the several problems of this form of analysis pin-pointed, that in this study programme changes were generally good indicators of policy change, providing a useful over-view of this important sphere of government policy.

Japan has been characterised as the most successful industrialised country in its ability to attain growth in GNP, even during a world recession. This article explores the background to the Japanese economic success of postwar years. It emphasises in particular the part played in that success by the Japanese banking sector and cheap credit extended to expanding industries. The article discusses the respective roles of the Ministry of Trade and Industry and the Ministry of Finance. It concludes that both domestic and international pressures are producing changes within the Japanese economy which are reflected in alterations in the tasks and influence of these institutions.