‘Development blocks’ in industrial economics

Abstract The investigation 1 An earlier version of this paper was presented at the Workshop on New Issues in Industrial Economics at Case Western Reserve University Cleveland, Ohio, June 7–10, 1987. is arranged in three sections: The first explains to what kind of analytical framework the 'development block' concept belongs. This concept is then defined, differentiated and related to others within the same framework. The definitions and differentiations have been derived from studies of industry and trade with the aim of striking a balance between, on the one side, economic history research with only little, mostly implicit, theory and, on the other side, very explicit theory with empirical data being used mainly to test more or less sophisticated models. There will be no attempt to outline a "general theory" which could possibly be tested empirically, i.e. by econometrics, but instead we shall seek to provide a sort of tool-box with analytical instruments, including the development block concept, which have proved useful in historical analyses. In a second section examples are given of Swedish industrial developments which have been analyzed and interpreted with the aid of such a tool-box. In the final section it is demonstrated how the results may be helpful in perceiving possible effects of various economic policies. It is argued that the macrotheoretical basis of economic policy measures has a drawback in its lack of microunderpinning worthy of the name industrial economics and even less that of industrial dynamics.