Class Forces, Political Institutions and State Intervention: Subnational Economic Development Policy in the U.S., 1971-1990

The United States has experienced a major devolution of social and economic policy responsibilities to the states. Subnational industrial policies to create jobs and qualitative economic growth are key to this devolution. The authors examine the development of these policies in terms of (1) the articulation of class interests, (2) state‐level political institutions, (3) prior political legacies, (4) underlying production regimes, and (5) interactions of strong political institutions and class mobilization. An annual pooled cross‐sectional time‐series analysis of three state‐level economic development policies (entrepreneurial, industrial recruitment, and labor market regulation) shows that in addition to business power and strong state capacities, the political legacies of 1930s welfare policy innovations and mezocorporatist bargaining potential condition the effects of business power.