<P>ENTREPRENEURSHIP &amp; REGIONAL DEVELOPMENT, 18, NOVEMBER (2006), 525–542</P>
<P>This paper assesses the relationships between public policy and the development of industrial<BR>clusters. A conceptual model of the relationship between public policies and the development<BR>of industrial clusters is developed and tested using data from 43 European industrial clusters.<BR>The results indicate that most government policies have no significant impact on the growth of<BR>industrial clusters or for the development of co-operation within industrial clusters. There is<BR>limited evidence that packages of government policies that are specifically geared towards<BR>improving the local asset base are effective in overcoming obstacles to growth of industrial<BR>clusters. However, when age is used as a control variable the weak relationship between policy<BR>packages and growth of industrial clusters disappear. The results indicate that individual<BR>and packages of public policies are not strongly connected to either high levels of co-operation,<BR>or high growth in industrial clusters. Moreover, no clear evidence was found that high levels<BR>of co-operation were associated with growth in industrial districts. In the light of the failure to<BR>find clear-cut associations between public policies and the development of industrial clusters the<BR>paper outlines a research agenda to help to increase our understanding of these issues.</P> <BR>