IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/121313.html

Industrial policy and the great divergence

Author

Listed:
  • Juhasz, Reka
  • Steinwender, Claudia

Abstract

We discuss recent work evaluating the role of the government in shaping the economy during the long 19th century, a practice we refer to as industrial policy. We show that states deployed a vast variety of different policies aimed at, primarily, but not exclusively, fostering industrialization. We discuss the thin, but growing literature that evaluates the economic effects of these policies. We highlight some fruitful avenues for future study.

Suggested Citation

  • Juhasz, Reka & Steinwender, Claudia, 2023. "Industrial policy and the great divergence," LSE Research Online Documents on Economics 121313, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:121313
    as

    Download full text from publisher

    File URL: https://researchonline.lse.ac.uk/id/eprint/121313/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 531-596.
    2. Dave Donaldson & Richard Hornbeck, 2016. "Railroads and American Economic Growth: A "Market Access" Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 799-858.
    3. Erik Hornung, 2015. "Railroads And Growth In Prussia," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 699-736, August.
    4. Brian D. Varian, 2023. "British exports and foreign tariffs: Insights from the Board of Trade's foreign tariff compilation for 1902," Economic History Review, Economic History Society, vol. 76(3), pages 827-843, August.
    5. Sokoloff, Kenneth L., 1988. "Inventive Activity in Early Industrial America: Evidence From Patent Records, 1790–1846," The Journal of Economic History, Cambridge University Press, vol. 48(4), pages 813-850, December.
    6. Liu, Cong, 2020. "The Effects of World War I on the Chinese Textile Industry: Was the World’s Trouble China’s Opportunity?," The Journal of Economic History, Cambridge University Press, vol. 80(1), pages 246-285, March.
    7. Lampe, Markus, 2009. "Effects of Bilateralism and the MFN Clause on International Trade: Evidence for the Cobden-Chevalier Network, 1860-1875," The Journal of Economic History, Cambridge University Press, vol. 69(4), pages 1012-1040, December.
    8. Ran Abramitzky & Philipp Ager & Leah Boustan & Elior Cohen & Casper W. Hansen, 2023. "The Effect of Immigration Restrictions on Local Labor Markets: Lessons from the 1920s Border Closure," American Economic Journal: Applied Economics, American Economic Association, vol. 15(1), pages 164-191, January.
    9. Pablo Fajgelbaum & Stephen J. Redding, 2022. "Trade, Structural Transformation, and Development: Evidence from Argentina 1869–1914," Journal of Political Economy, University of Chicago Press, vol. 130(5), pages 1249-1318.
    10. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Belloc, Filippo & Lofaro, Antonino, 2026. "Subsidies, new firms, and productivity in global manufacturing," International Journal of Industrial Organization, Elsevier, vol. 104(C).
    2. Ossa, Ralph & Redding, Stephen, 2026. "The Economics of Tariffs," CEPR Discussion Papers 21221, Centre for Economic Policy Research.
    3. Doré, Natalia I. & Araújo, Eliane, 2025. "Long-term analysis of Kaldor's law applied to Brazil (1909-2020)," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 147-157.
    4. Brian D. Varian, 2025. "Effective Rates of Protection in an Industrialising, Settler Economy: Estimates for Victoria (Australia) in 1880," Economic Papers, The Economic Society of Australia, vol. 44(2), pages 136-146, June.
    5. Grafström, Jonas, 2025. "Vertical industrial policy: principles, practice and potential," Ratio Working Papers 384, The Ratio Institute.
    6. Suesse, Marvin & Grigoriadis, Theocharis, 2025. "Financing Late Industrialization: Evidence from the State Bank of the Russian Empire," The Journal of Economic History, Cambridge University Press, vol. 85(4), pages 1170-1206, December.
    7. Brian D. Varian, 2025. "Effective Rates of Protection in an Industrialising, Settler Economy: Estimates for Victoria (Australia) in 1880," CEH Discussion Papers 02, Centre for Economic History, Research School of Economics, Australian National University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    2. Chen, Shuo & Li, Jianan & Yao, Qin, 2024. "Canal and trade: Transportation infrastructure and market integration in China, 1780–1911," Journal of Comparative Economics, Elsevier, vol. 52(4), pages 793-812.
    3. Jung, Yeonha, 2023. "Formation of the legacy of slavery: Evidence from the US South," European Economic Review, Elsevier, vol. 154(C).
    4. Atack, Jeremy & Margo, Robert A. & Rhode, Paul W., 2022. "Industrialization and urbanization in nineteenth century America," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    5. Alexander Donges & Jean-Marie Meier & Rui C. Silva, 2023. "The Impact of Institutions on Innovation," Management Science, INFORMS, vol. 69(4), pages 1951-1974, April.
    6. Miotto, Martina & Pascali, Luigi, 2025. "Solving the longitude puzzle: A story of clocks, ships and cities," Journal of International Economics, Elsevier, vol. 155(C).
    7. Cinnirella, Francesco & Hornung, Erik, 2016. "Landownership concentration and the expansion of education," Journal of Development Economics, Elsevier, vol. 121(C), pages 135-152.
    8. Wolfgang Keller & Carol H. Shiue, 2020. "Market integration and institutional change," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 251-285, May.
    9. Neubert, Magnus & Nikolić, Stefan, 2026. "Why railways fail: Colonial railways and economic development in Habsburg Bosnia–Herzegovina," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 181, pages 1-17.
    10. Luca De Benedictis & Vania Licio & Anna Maria Pinna, 2023. "From the historical Roman road network to modern infrastructure in Italy," Journal of Regional Science, Wiley Blackwell, vol. 63(5), pages 1162-1191, November.
    11. Donges, Alexander & Selgert, Felix, 2019. "The Consequences of Radical Patent-Regime Change," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203662, Verein für Socialpolitik / German Economic Association.
    12. Fenske, James & Kala, Namrata & Wei, Jinlin, 2023. "Railways and cities in India," Journal of Development Economics, Elsevier, vol. 161(C).
    13. Carlo Ciccarelli & Torben Dall Schmidt, 2022. "The impact of history on regional development," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(3), pages 219-225, December.
    14. Cucu, Florin, 2025. "Roads, internal migration and the spatial sorting of U.S. high-skill workers," Journal of Urban Economics, Elsevier, vol. 146(C).
    15. Johnson, Noel D. & Koyama, Mark, 2017. "Jewish communities and city growth in preindustrial Europe," Journal of Development Economics, Elsevier, vol. 127(C), pages 339-354.
    16. Quamrul H. Ashraf & Francesco Cinnirella & Oded Galor & Boris Gershman & Erik Hornung, 2017. "Capital-Skill Complementarity and the Emergence of Labor Emancipation," Working Papers 2017-1, Brown University, Department of Economics.
    17. Stephen J. Redding & Esteban Rossi-Hansberg, 2017. "Quantitative Spatial Economics," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 21-58, September.
    18. Stephan Maurer & Ferdinand Rauch, 2023. "Economic geography aspects of the Panama Canal," Oxford Economic Papers, Oxford University Press, vol. 75(1), pages 142-162.
    19. Vitola, Alise & Grigoriadis, Theocharis, 2018. "Diversity & empire: Baltic Germans & comparative development," Discussion Papers 2018/6, Free University Berlin, School of Business & Economics.
    20. Garcia-López, Miquel-Àngel & Herranz-Loncán, Alfonso & Tassinari, Filippo & Viladecans-Marsal, Elisabet, 2023. "Paving the way to modern growth: The Spanish Bourbon roads," Explorations in Economic History, Elsevier, vol. 90(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation
    • N6 - Economic History - - Manufacturing and Construction

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:121313. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.