Industrial Organization and the New Industrial Policy
AbstractThe purpose of this paper is to try to shed some new light on the current industrial policy crisis. This paper proposes that the industrial policy debate is shaped by knowledge about the functioning of the underlying industrial structure, which in turn is the Gegenstand of scholars in the field of industrial economics. The main conclusion is that the current industrial policy dilemma is the result of a shift in the fundamental long-run forces underlying the organization of industries. The declining long-run average cost curves characteristic of manufacturing for the better part of a century have given way to the generation and commercialization of new knowledge as the predominant economic force determining comparative advantage. The traditional instruments of industrial policy - anti-trust, regulation and public ownership - have correspondingly given way to a new set of industrial policies that, rather than focusing on restraining the freedom of large corporations to contract, are devoted to the creation and commercialization of new knowledge.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1997.
Date of creation: Oct 1998
Date of revision:
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Find related papers by JEL classification:
- L00 - Industrial Organization - - General - - - General
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L4 - Industrial Organization - - Antitrust Issues and Policies
- L5 - Industrial Organization - - Regulation and Industrial Policy
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
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