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A New Wave of Industrial Policy in Asia-Pacific: Could Resurgence lead to Structural Transformation?

Author

Listed:
  • Paula Arias
  • Vanya Georgieva
  • Rahul Giri
  • Maria González-Miranda
  • Mr. Ashique Habib
  • Anne-Charlotte Paret
  • Tatjana Schulze
  • Arthur Xie
  • Weining Xin
  • Yichen Xu
  • Dilan Yang

Abstract

This paper provides a first comprehensive assessment of industrial policy (IP) across Asia‑Pacific and its potential to enable structural transformation. Building an IP database for 2009–2024, paired with a rich dataset, the paper documents a large wave of IP interventions. Subsidies dominate, followed by import-limiting measures. Novel applications of machine‑learning and clustering approaches to assess IP targeting suggest that, ex-ante, about three-quarters of IP could align with structural transformation strategies, including relatively safe (“safe-bets”) and risky (“moonshots”) strategies promoting technological upgrading and diversification, and strategies to alleviate market‑frictions and distortions in key sectoral nodes. IP’s ex-post linkages to trade, competitiveness, and domestic firms’ indicators are small and short‑lived; sustained gains that could lead into structural transformation appear only sporadically. Our findings underscore the need for a more parsimonious and carefully‑designed IP—anchored to targeting clear market‑failure rationales and complemented by ambitious structural reforms—potentially enhancing effectiveness and lowering net costs.

Suggested Citation

  • Paula Arias & Vanya Georgieva & Rahul Giri & Maria González-Miranda & Mr. Ashique Habib & Anne-Charlotte Paret & Tatjana Schulze & Arthur Xie & Weining Xin & Yichen Xu & Dilan Yang, 2026. "A New Wave of Industrial Policy in Asia-Pacific: Could Resurgence lead to Structural Transformation?," IMF Working Papers 2026/101, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2026/101
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