Structural Constraints, Indigenous Capability and the Political Economy of Late Industrialization in the Steel Sector

Abstract

The paper offers a political economy analysis of the structural, technical and socio-political (STP) factors associated with industrial policy implementation in a resource-based economy. Trinidad and Tobago (T&T), a less well-known case in the steel sector, illustrates in contrast to mainstream assumptions, that formal market-supporting institutions, such as property rights and the rule of law do not explain its industrial performance. It suggests the interplay of interrelated forces at the domestic and international levels, namely acquisition of state-of-the-art technologies, and an international commodity boom coupled with collective organizational skills and mobilizations of social actors that together propelled state-led industrialization. Employing historical data, the paper explains the rise and decline of steel manufacturing from the period of state-led industrialization underpinned by a specific STP configuration that generated increasingly complex skills, products and new employment. The fall of global demand and protectionism in the United States prompted its privatization and undermined indigenous capability.