The politics of developmental alliances and municipal industrial policy in Central and Eastern European cities

Abstract

Comparative political economists have been late to acknowledge the role of municipalities in industrial policy. Given that industrial policy is traditionally the province of central governments, when and why do cities follow national industrial policy priorities and when and why do they deviate from them? To address the question, the article compares three middle-sized municipalities in Central and Eastern Europe whose economic catch-up strategies shaped their transformation into dynamic economic hubs for the region – a different fate from other comparable cities. Thus, Gdansk (Poland) becomes a manufacturing and knowledge economy hub, Cluj (Romania) morphs into a knowledge economy hub with manufacturing in tow, while Debrecen (Hungary) is reborn predominantly as a manufacturing hub accompanied by an emerging business services sector. While the initiatives of municipal developmental alliances complemented the national export-led growth model in all three cities, only Debrecen fully aligned with the national industrial policy, while Cluj sharply deviated from it, with Gdansk being an intermediary case. The paper argues that this variation can be explained by three factors: pre-existing economic legacies in frontier and legacy sectors, the politics of leadership in local developmental alliances, and the politics governing the embedded autonomy of city governments in both the private sector and the central government (double embedded autonomy).