A New Outlook On Industrial Policies

Industrial policy is making a comeback in the United States. It is more urgent than ever to understand how and whether industrial policy has worked to strengthen the US economy. This study analyzes and scores 18 US industrial policy episodes implemented between 1970 and 2020, in an effort to assess what went right and what went wrong—and how the current initiatives might fare. The Peterson Institute for International Economics gratefully acknowledges the support of the Koch Foundation for this project.

Industrial policy is tainted with bad reputation among policymakers and academics and is often viewed as the road to perdition for developing economies. Yet the success of the Asian Miracles with industrial policy stands as an uncomfortable story that many ignore or claim it cannot be replicated. Using a theory and empirical evidence, we argue that one can learn more from miracles than failures. We suggest three key principles behind their success: (i) the support of domestic producers in sophisticated industries, beyond the initial comparative advantage; (ii) export orientation; and (iii) the pursuit of fierce competition with strict accountability.

Development and Modern Industrial Policy in Practice provides an up-to-date analysis of industrial policy. Modern industrial policy refers to the set of actions and strategies used to favor the more dynamic sectors of the economy. A key aspect of moder

In contrast to what observers have frequently argued, this timely and thought provoking book suggests that the concept of industrial policy is not alien to the American past and present. The debate on this topic in the US has always been full of contradictory rhetoric and policy practices, and the expert authors therefore acknowledge a need to rethink the traditional antagonist positions. They illustrate that contemporary markets continue to demand to be fixed by government policies, and governments continue to show how fixing-the-market policies might fail. The conclusion is that the future of industrial policy is about how to make both markets and governments better in their functioning, but that the real goal for industrial policy is to make better-market and better-government policies consistent with the goal of building a better society. Affirming that it is time to break the taboo and discuss the nationÕs goals, targets, and tools to develop a new, effective American industrial policy, this pathbreaking book will prove a thought provoking and challenging read for students, academics and policymakers with an interest in political economy and industrial policy, public sector and international economics.

Industrial policy has long been regarded as a strategy to encourage sector-, industry-, or economy-wide development by the state. It has been central to competitiveness, catching up, and structural change in both advanced and developing countries. It has also been one of the most contested perspectives, reflecting ideologically inflected debates and shifts in prevailing ideas. There has lately been a renewed interest in industrial policy in academic circles and international policy dialogues, prompted by the weak outcomes of policies pursued by many developing countries under the direction of the Washington Consensus (and its descendants), the slow economic recovery of many advanced economies after the 2008 global financial crisis, and mounting anxieties about the national consequences of globalization. The Oxford Handbook of Industrial Policy presents a comprehensive review of and a novel approach to the conceptual and theoretical foundations of industrial policy. The Handbook also presents analytical perspectives on how industrial policy connects to broader issues of development strategy, macro-economic policies, infrastructure development, human capital, and political economy. By combining historical and theoretical perspectives, and integrating conceptual issues with empirical evidence drawn from advanced, emerging, and developing countries, The Handbook offers valuable lessons and policy insights to policymakers, practitioners and researchers on developing productive transformation, technological capabilities, and international competitiveness. It addresses pressing issues including climate change, the gendered dimensions of industrial policy, global governance, and technical change. Written by leading international thinkers on the subject, the volume pulls together different perspectives and schools of thought from neo-classical to structuralist development economists to discuss and highlight the adaptation of industrial policy in an ever-changing socio-economic and political landscape.

This volume presents some of the most critical and erudite opinions on the economy today. Bringing together the experience, predictions, and recommendations of distinguished leaders in politics, labor, and business, it provides a comprehensive examination of contrasting views in order to identify the shape that America's new industrial policy may take.