The political economy of industrial development organisations: are they run by politicians or bureaucrats?

This paper produces the first cross-country comparable, scalable method of categorising organisations as political or bureaucratic. I use this method to construct new data on the politicisation of organisations designing industrial policy in 116 countries. Thus, this paper produces the first systematic global analysis of the politicisation of industrial development organisations. I produce the following four stylised facts. First, industrial policymaking is predominantly political. Over 60% of the industrial policy organisations in my data are run by politicians. Second, lower-income countries use a higher proportion of political organisations to do their industrial policy. Third, there is great variation in the proportion of political organisations in each policy area. Politicians run 30% of Export Import and Central banks. Politicians run 60% of organisations focused on primary commodities. Fourth, the proportion of organisations run by bureaucrats is positively and statistically significantly correlated with several measures of bureaucratic quality. This relationship is robust to controlling for the number of industrial policy organisations and GDP per capita.