No policy is an island - on the interaction between industrial and other policies
AbstractConsidering industrial policy from the perspective of other economic policies, this paper seeks to identify the sources and consequences of conflicts between industrial, competition, trade, and fiscal policies. The goals of industrial policy, even when economically justified in isolation, are in certain circumstances in an intrinsic conflict with especially competition and trade policy goals. Industrial policy also lacks its own independent instruments, and fiscal policy instruments are frequently used and often economically optimal to implement industrial policy, which can create a policy conflict even when the goals themselves are independent. For these reasons, the cost of industrial policy is often the sacrifice of some other policy goal. This interdependence narrows the scope for economically sensible industrial policy.
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Bibliographic InfoPaper provided by European Investment Bank, Economics Department in its series EIB Papers with number 7/2006.
Length: 26 pages
Date of creation: 15 Apr 2009
Date of revision:
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industrial policy; goal conflicts; instrument dependence;
Find related papers by JEL classification:
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
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- Farla, Kristine, 2012. "Industrial policy for growth," MERIT Working Papers 039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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