These types of policy networks are being described
as vertical since it is the state that transfers scarce
resources to private sector participants and thereby creating
more of a sequential and interdependent relationship.
In addition to utilizing Quagos (quasi-autonomous
government organizations), industrial policy networks
often rely on Quangos (quasi-autonomous non-governmental governmental
organizations) as implementation units. In addition,
the state has been manipulating property rights to
put pressures on private sector participants for organizational
changes (North, 1981). According to Campbell
and Lindberg (1990), property rights actions by the state
not only create pressures for changes that cause the
actors to look for new organizational forms, but also
constrain and influence how actors select different
forms. Prior research has ignored the fact that the capacity
of the state to influence to establish property rights
gives it a general strength as it enables state actors to
alter the organization of the governance structure. The
state comprises many actors who undertake property
rights actions that contribute to inter-agency and publicprivate
interactions, For instance, an individual agency
makes rules concerning its interaction with the public or
procedure concerning procurement process. This has
important influence on the composition of the policy
network since the state can institute entry barriers.