@heading(Chapter IV.  Industrial Policy: Politics and Priorities)


What industrial policy options are favored by state business, labor,
government officials, minority groups, educators, and the general public?
This chapter will contrast the views of those favoring economic
restructuring with the views of those who oppose any changes in their own
relative economic position.  To a degree, state industrial policy choices
can be examined as a function of the relative influence of competing
interests within state politics.  But state political structure,
institutional development, and the history of previous state policy choices
can also influence industrial policy strategy, as can the degree of
economic distress.  Public opinion may also carry some weight, at least
with elected officials; states differ in the degree to which government
activism and high levels of spending will be tolerated by voters.  This
chapter will therefore describe an empirical analysis of the relationships
among influence, structure, priorities, and policy choices in states faced
with rising unemployment and deindustrialization.  The results show that,
while adverse economic conditions clearly stimulate state industrial policy
innovation, the mixture of policies adopted is strongly influenced by
political factors.

@heading(I.  Public preferences: Salience, Responsibility, Support for Specific
       Policies)

As students of comparative state politics are all too well aware,
comparable state-by-state surveys are not usually available concerning
political issues.  We must usually rely on national public-opinion polls,
on proxy measures (demographic data, electoral results), or on surveys
conducted in individual states.  Except in a few large states (such as
California) with well-established statewide polls, elected officials are in
the same position; they too lack reliable survey evidence concerning mass
opinion in their state.  Under those circumstances, and because industrial
policy is a complex and often technical issue, one might reasonably ask
whether mass preferences are even relevant to this issue.  But before we
turn to that complex question in Chapter 5, let us consider the available
evidence concerning the preferences of the general public regarding state
economic and industrial policy.  Three issues are relevant:  the salience
of economic and industrial-policy issues to the general public, the
assignation of responsibility for dealing with perceived economic problems,
and aupport for specific policy alternatives.

There can be little dispute about the salience of unemployment as a state
issue.  As Herzik (1983) noted, it was the #1 issue for governors
running for election in 1982, and in this they appeared to reflect
constituency concerns.  In that recession year, unemployment was the most
salient concern named when the American public was asked the Gallup Poll's
perennial question, "What do you think is the most important issue facing
the country?"

But concern with unemployment in the states was not limited to a recession
year.  A national survey conducted by the Council of State Governments
(CSG) in 1987 found that unemployment was cited as the most important issue
facing the states, by 22 percent of respondents; the general economy came
in third, with 8 percent (1).  Much higher percentages were found in a
telephone survey of Southwestern Pennsylvania residents in 1986 (2).
Seventy-nine percent of those surveyed gave unemployment as the most
important issue facing their region.  "The economy in general" was
mentioned by another five percent, but no other issue received even one
percent of the responses to that open-ended question.