Political resources and direct state intervention: The adoption of public venture capital programs in the American States, 1974-1990

Discussions of policy formation have reached an impasse with accumulating support for rival theories. We address this impasse by advancing a "political resource" theory that synthesizes class-, state-centered, neocorporatist and institutional ideas to explain policy formation in advanced capitalist democracies. Political institutions constitute infrastructural resources that condition the instrumental resources of class actors and channel the effects of class mobilization. Capitalists have systemic power by virtue of the state's dependence on private capital accumulation. We use this theory to explain the direct economic intervention of state governments in the U.S. in creating public venture capital programs in the 1970s and 1980s. An event history analysis shows that the adoption of these programs was shaped by a mesocorporatist "pact" combining capital/labor peak association bargaining with administrative capacities, structural dependence on corporate profits and manufacturing industry, professionalized state legislatures pressured by deindustrialization and the loss of instrumental resources due to declining Federal transfers to state governments. In an era of globalization and economic restructuring, the subnational state has become a centerpoint for industrial policy innovations in pluralistic states like the U.S.