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The politics of industrial adjustment in Canada : the case of the footwear industry Ramesh, M.


The purpose of this study is, first, to describe the Canadian government's policy for the domestic footwear industry during the 1970-1985 period, and second, to account for the forces that shaped it. The analysis is conducted within an "organizational" framework, which is based on the approach developed by Peter Hall. The framework postulates that the relationships within and among state, societal, and international political-economic institutions are the key determinants of economic policy. The study argues that it is the conflicts within and among the state, manufacturing interests (business and labour in the footwear industry, and those in the supplying industries), and trading interests (importers and retailers dealing in footwear), conditioned by international political economy, that shaped the government's policy. It is concluded that the state and manufacturing interests formed internally united organizations and pursued well defined objectives. The state's objective was to assist the industry through high tariffs and financial aid for modernization. In contrast, the manufacturing interests' objective was to secure quotas on imports. While the two sides were internally united, neither were sufficiently strong to impose their objectives on the other. The international political economy favoured the use of tariffs and financial assistance. At the same time, circumstances arose -- resulting from economic recession, appreciation of the Canadian dollar, and the threat of Quebec separatism--that made it difficult for the state to resist the manufacturing interests' demands. In such circumstances, the industry succeeded, if only temporarily, in securing quotas in addition to tariffs and financial assistance. The trading interests were somewhat divided among themselves, which restricted their capacity to participate effectively in the policy process. Their positions were relevant only to the extent they could be selectively used by the state to resist the manufacturing interests' demands. A theme of major theoretical significance that emerges from this study is the importance of international political economy in the making of domestic policies. The second theoretical implication of the study is the need to view the state and societal actors in a policy process not just as players, but also as structures. They form an organized relationship, both within and in relation to each other, which facilitates the pursuit of some objectives and impedes the accomplishment of others.

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