Politics, economics and the international steel industry

The international steel industry has worked itself into a state of perpetual crisis, wherein politics rather than economics is becoming important as the determinant of global production and trade relationships, and political decisions are replacing market decisions in determining the location of production. The peculiarities of the industry, together with increasing national concern for problems of economic adjustment have stimulated the direct and indirect intervention of government in the industry, and encouraged firms to engage in protection-seeking rather than adjustment-oriented behaviour. More than in most other industries, this protection-seeking behaviour has been successful, and has seriously eroded the role of market competition. The paper explores the evolution of the international steel industry, and develops a political-economic model to explain such behaviour, and evaluate its results.