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The case for industrial policy : a critical survey

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  • Pack, Howard
  • Saggi, Kamal

Abstract

What are the underlying rationales for industrial policy? Does empirical evidence support the use of industrial policy for correcting market failures that plague the process of industrialization? To address these questions, the authors provide a critical survey of the analytical literature on industrial policy. They also review some recent industry successes and argue that only a limited role was played by public interventions. Moreover, the recent ascendance of international industrial networks, which dominate the sectors in which less developed countries have in the past had considerable success, implies a further limitation on the potential role of industrial policies as traditionally understood. Overall, there appears to be little empirical support for an activist government policy even though market failures exist that can, in principle, justify the use of industrial policy.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3839.

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Date of creation: 01 Feb 2006
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Handle: RePEc:wbk:wbrwps:3839

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Keywords: Economic Theory&Research; ICT Policy and Strategies; Water and Industry; Industrial Management; Markets and Market Access;

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References

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Citations

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Cited by:
  1. Bernard Hoekman & Will Martin & Carlos A. Primo Braga, 2009. "Trade Preference Erosion : Measurement and Policy Response," World Bank Publications, The World Bank, number 9437.
  2. Kjetil Bjorvatn & Nicola D. Coniglio, 2007. "On the importance of openness for industrial policy design in developing countries," series 0014, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Feb 2007.
  3. Bjorvatn, Kjetil & Coniglio, Nicola Daniele, 2012. "Big push or big failure? On the effectiveness of industrialization policies for economic development," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 129-141.
  4. Daniel Lederman & William F. Maloney, 2012. "Does What You Export Matter? In Search of Empirical Guidance for Industrial Policies," World Bank Publications, The World Bank, number 9371.
  5. Shimada, Go, 2013. "The Economic Implications Of Comprehensive Approach To Learning On Industrial Development (Policy And Managerial Capability Learning):," Working Papers 1001, JICA Research Institute.
  6. Pitelis, Christos & Kelmendi, Pellumb, 2009. "The political economy of European anti-trust and industrial policy," MPRA Paper 23941, University Library of Munich, Germany.
  7. Marcus Noland & Howard Pack, 2005. "The East Asian Industrial Policy Experience: Implications for the Middle East," Working Paper Series WP05-14, Peterson Institute for International Economics.
  8. Benhassine, Najy & Raballand, Gaël, 2009. "Beyond ideological cleavages: A unifying framework for industrial policies and other public interventions," Economic Systems, Elsevier, vol. 33(4), pages 293-309, December.
  9. Schafer, Martin & Efken, Josef & Wendt, Heinz & Trefflich, Annette & Uetrecht, Inge, 2007. "Public Support of the Processing and Marketing of Agricultural Products: A Driver of Innovation in the Food Industry?," 2007 1st Forum, February 15-17, 2007, Innsbruck, Austria 6605, International European Forum on Innovation and System Dynamics in Food Networks.
  10. Itzhak Goldberg & John Gabriel Goddard & Smita Kuriakose & Jean-Louis Racine, 2011. "Igniting Innovation : Rethinking the Role of Government in Emerging Europe and Central Asia," World Bank Publications, The World Bank, number 2358.
  11. Altenburg, Tilman & Engelmeier, Tobias, 2013. "Boosting solar investment with limited subsidies: Rent management and policy learning in India," Energy Policy, Elsevier, vol. 59(C), pages 866-874.

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