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China, India, And Industrial Policy For Inclusive Growth



    (Department of Economics, University of California, Santa Cruz, CA 95064, USA)


    () (Department of Economics, University of California, Santa Cruz, CA 95064, USA)


This paper discusses a possible case for industrial policy with special reference to the two emerging global giants, China and India. It begins with a clarification of the meaning of industrial policy, since not only does the term mean different things to different people, but the traditional and narrow definitions leads to significantly different conclusions than more recent, broader definitions. In the context of definition of the term, the paper also reviews the arguments for and against industrial policy, and discusses industrial policy in the context of globalization, including the evolution of multilateral trading rules. The main arguments of the paper discuss the Chinese and Indian economies, exploring in particular their past experience with variants of industrial policies. The similarities of the "China model" to past East Asian experience are explored, while the contrasts of India's development, and the distinction between liberalization and reform are examined. These two major country cases form the basis for a consolidation of recent conceptual ideas, where effective and successful industrial policy is viewed as part of a social contract, creating a pathway to inclusive growth.

Suggested Citation

  • Inderjit Kaur & Nirvikar Singh, 2013. "China, India, And Industrial Policy For Inclusive Growth," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 1-27.
  • Handle: RePEc:wsi:ceprxx:v:02:y:2013:i:01:n:s1793969013750010
    DOI: 10.1142/S1793969013750010

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    References listed on IDEAS

    1. Banerjee, Abhijit V. & Cole, Shawn & Duflo, Esther, 2005. "Banking Reform in India," India Policy Forum, National Council of Applied Economic Research, vol. 1(1), pages 277-332.
    2. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    3. Robin Burgess & Rohini Pande & Grace Wong, 2005. "Banking for the Poor: Evidence From India," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 268-278, 04/05.
    4. Marcus Noland, 2007. "Industrial Policy, Innovation Policy, and Japanese Competitiveness," Working Paper Series WP07-4, Peterson Institute for International Economics.
    5. Marcus NOLAND, 2007. "From Industrial Policy to Innovation Policy: Japan's Pursuit of Competitive Advantage," Asian Economic Policy Review, Japan Center for Economic Research, vol. 2(2), pages 251-268, December.
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    More about this item


    Industrial policy; China model; India; inclusive growth; comparative advantage; economic reform; O10; O25; O40; O57; P52;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies


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