Coordination failures, clusters, and microeconomic interventions

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dc.description.abstract This paper discusses coordination failures, their relevance to developing countries, and the circumstances under which they occur, arguing that clusters can be seen as agglomerations of firms and organizations in related economic activities among which coordination failures are likely to arise. In other words, clusters provide opportunities for microeconomic interventions that promote coordination and collective action to improve productivity. Subsequently presented is a model of a small economy plagued by sector or cluster-specific coordination failures, which demonstrates that policy should foster cooperation in sectors where the economy already shows comparative advantage. In regard to innovation, general policies that aim to increase innovation across the board are likely to be inferior to policies that take a more selective approach by trying to induce the development of innovation clusters in areas of comparative advantage. The paper concludes with suggestions on how an understanding of coordination failures and clusters can form the basis for a set of effective microeconomic interventions for middle-income countries. en
dc.title Coordination failures, clusters, and microeconomic interventions en
dc.contributor.author Rodríguez-Clare, Andrés
dc.contributor.other Comments by Francisco Rodríguez and Ronald Fischer
dc.date.accessioned 2014-11-17T01:27:12Z
dc.date.available 2014-11-17T01:27:12Z
dc.date.issued 2005-10
dc.identifier.issn 1529-7470
dc.identifier.uri http://hdl.handle.net/123456789/48738
dc.language.iso en
dc.publisher Brookings Institution Press
dc.subject Microeconomics
dc.subject Clusters
dc.subject Industrial policy
dc.subject Firm performance
dc.subject Developing countries
dc.type Article
lacea.language.supported en

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