Industrial districts, social cohesion and economic decline in Italy

Abstract

The economic and social vitality of industrial districts (IDs) depends on the interaction between two major sub-systems: a community of people and a population of firms. A range of circumstances determined inconsistencies between the rationales of these two sub-systems. The emergence of leader firms that substitute the ID as coordinating instances and cost scrapping as a strategy that bypasses quality enhancement undermine the ID as a system. The paper contends that this outcome is not the only possible one. An alternative would require a regulatory-as opposed to merely permissive-action of public actors. © The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.