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A Short Guide to Thinking About Industrial Policy: Takeaways from the New Economics of Industrial Policy

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  • Juhász, Réka
  • Lane, Nathaniel

    (University of Oxford)

Abstract

The recent return of industrial policy has inspired a new economic literature on industrial policy. This chapter summarizes six high-level insights from this nascent literature. (1) Properly defined, industrial policy is a vast space. (2) Its use is widespread and on the rise. (3) Given the breadth and extent of industrial policy, sweeping, binary claims about it are unsustainable. (4) The emerging empirical picture is complex and should be. (5) Political economy is first order, and institutional details matter as much as technical details. (6) We should not discount the potential of smaller, contemporary transformations; best practices and policy lessons are likely in our backyard. We point to some recent experiences in developing countries. These takeaways are not exhaustive and point to a more nuanced, pragmatic body of knowledge.

Suggested Citation

  • Juhász, Réka & Lane, Nathaniel, 2024. "A Short Guide to Thinking About Industrial Policy: Takeaways from the New Economics of Industrial Policy," SocArXiv 4sra7_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:4sra7_v1
    DOI: 10.31219/osf.io/4sra7_v1
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    References listed on IDEAS

    as
    1. Réka Juhász & Nathan Lane, 2024. "The Political Economy of Industrial Policy," Journal of Economic Perspectives, American Economic Association, vol. 38(4), pages 27-54, Fall.
    2. Cailin Slattery & Owen Zidar, 2020. "Evaluating State and Local Business Tax Incentives," Working Papers 261, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Pack, Howard, 2000. "Industrial Policy: Growth Elixir or Poison?," The World Bank Research Observer, World Bank, vol. 15(1), pages 47-67, February.
    4. Manelici, Isabela & Pantea, Smaranda, 2021. "Industrial policy at work: Evidence from Romania’s income tax break for workers in IT," European Economic Review, Elsevier, vol. 133(C).
    5. Nathaniel Lane, 2020. "The New Empirics of Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 20(2), pages 209-234, June.
    6. Cailin Slattery & Owen Zidar, 2020. "Evaluating State and Local Business Incentives," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 90-118, Spring.
    7. Chiara Criscuolo & Nicolas Gonne & Kohei Kitazawa & Guy Lalanne, 2022. "Are industrial policy instruments effective?: A review of the evidence in OECD countries," OECD Science, Technology and Industry Policy Papers 128, OECD Publishing.
    8. Ernest Liu, 2019. "Industrial Policies in Production Networks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 1883-1948.
    9. Juhász, Réka & Lane, Nathaniel & Oehlsen, Emily & Pérez, Verónica C., 2022. "The Who, What, When, and How of Industrial Policy: A Text-Based Approach," SocArXiv uyxh9, Center for Open Science.
    10. Oyeyemi Adegbite, 2021. "Perspectives on Industrial Development in Nigeria," Advances in African Economic, Social and Political Development, Springer, number 978-3-030-84375-5, January.
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