Major Issues In The Role Of Trade And Industrial Policies In Developing Countries

The nature, extent and objectives of industrial and trade policies and consequent implications for state intervention in the economies of developing countries may change over time. There exist no universal optimal industrial and trade policies for all developing countries. The initial conditions of a given Country may dictate largely the kind of optimal policies needed and the nature and scope of state intervention required. At the initial stages of industrialization. where there are no functioning markets. ,state intervention could be quite extensive. On the other hand. as the economy advances along the trajectory of industrialization. and its structure becomes more complex and sophisticated. the role of the state becomes progressively diminished and resource allocation will be increasingly guided by market signals.