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The last twenty or so years have witnessed major structural changes in western economies. The associated process of de-industrialization has expressed itself in large increases in unemployment, placing considerable pressure to respond on policy makers. Economic changes were apparent not only at the national level, but also affected local economies, if to varying degrees. These variations, reflecting local individuality, including specific historical, economic, social and political features, posed the main challenge to policy responses. This included the division of policy making responsibility between local and central government. The nature of the responses to local economic problems attracted a lively debate, especially over the role of the local state in expressing local interests and individuality. It provides the conceptual context to this study, combining the nature of the local state with that of economic restructuring. This leads to the concept of policy restructuring, comprising a growing focus of policy initiatives on, distinctive local economic features, in relation to the development of new economic structures. Its main characteristics address the distinctive position of each locality in attracting niche investments from local and outside businesses. This shift in policies, it is argued, can be identified in a move from universal to locality-specific initiatives. The extent to which this move is a logical outcome for central or local government is a question central to this study, requiring the investigation of different government systems. England and Germany illustrate two different approaches, with relatively weaker and stronger local government respectively, providing a different background to the economic policies investigated in nine cities. This allows examination of the ways in which a centralized and a decentralized government system has responded to the common challenge of economic restructuring during the 1980s. The analysis of capital expenditure as 'visible' expression of policies provides the basis of a comparative approach, along with interviews and policy documents. The question of whether a locally or centrally-led system is better equipped to adapt to rapid restructuring has greatly gained in significance since German unification. The current extent of the problem shows parallels with changes in the British economy since the 1970s. Thus, it may be argued, policy responses in the latter may be a valuable guide to those based on the West German experience, where economic change has been much more gradual. This study sets out to shed some further light on this question, including possible lessons from the experiences of nine cities. This includes in particular the aspect of local government control and local individuality, which transcends national boundaries.