Governance structures in local productive systems

Abstract

The aim of this paper is to discuss the issue of governance in local production systems. First, a set of factors that condition the existence and the structure of governance are developed, and then the main analytical approaches are summarized. On the basis of these analytical approaches, and taking into account the factors that influence governance, the paper presents two illustrative cases as examples of success and failure in the establishment of governance structures in local production systems. It concludes that governance structures in local, production systems are effectively conditioned, in each case, by specific characteristics such as: production structure, kind of product and its technological base, form of production organization, form of market insertion, existence of lead firms and active local institutions, and the social, cultural, and political context. The overall conclusion is that local, private and public governance structures are superior and that public policies can play a relevant role in the development of local production systems.