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Industrial Policy and Growth

  • Helen Shapiro
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    The paper highlights how the rationales and instruments of industrial policy have changed since the 1960s. It finds that theories of industrialization have come full circle, as many of the assumptions behind the market failure paradigm have made a comeback. The policy implications of these theories, however, have not been similarly resurrected. It makes an explicit comparison between the strategies of East Asia and Latin America, and reviews the explanations for their divergent performance. It identifies a “back to the future” quality of Latin America’s situation, pointing to the region’s balance of payments constraint and dependence on commodity-like industrial products.

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    Paper provided by United Nations, Department of Economics and Social Affairs in its series Working Papers with number 53.

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    Length: 17 pages
    Date of creation: Aug 2007
    Date of revision:
    Handle: RePEc:une:wpaper:53
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    1. Rodrik, Rani, 1995. "Trade and industrial policy reform," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 45, pages 2925-2982 Elsevier.
    2. S. Smirnov, 2001. "Industrial Policy," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 44(7), pages 78-95, November.
    3. Paul M. Romer, 1993. "New Goods, Old Theory, and the Welfare Costs of Trade Restrictions," NBER Working Papers 4452, National Bureau of Economic Research, Inc.
    4. Antonio Ciccone & Kiminori Matsuyama, 1992. "Start-up Costs and Pecuniary Externalities as Barriers to Economic Development," Discussion Papers 1031, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    5. Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989. "Industrialization and the Big Push," Scholarly Articles 3606235, Harvard University Department of Economics.
    6. Sanjaya Lall, 2013. "Reinventing Industrial Strategy: The Role Of Government Policy In Building Industrial Competitiveness," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 785-829, November.
    7. Jos� Antonio Ocampo, 2004. "Beyond the Washington consensus: what do we mean?," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 27(2), pages 293-314, December.
    8. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
    9. Bruton, H.J., 1998. "A Reconsideration of Import Substitution," Center for Development Economics 156, Department of Economics, Williams College.
    10. Marcelo de Paiva Abreu, 2005. "Which "industrial policies" are meaningful for Latin America?," Textos para discussão 493, Department of Economics PUC-Rio (Brazil).
    11. Juan Carlos Moreno-Brid & Esteban P�Rez Caldentey & Pablo Ruíz Nápoles, 2004. "The Washington consensus: a Latin American perspective fifteen years later," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 27(2), pages 345-365, December.
    12. Roberts, Mark J. & Tybout, James R., 1995. "An empirical model of sunk costs and the decision to export," Policy Research Working Paper Series 1436, The World Bank.
    13. Daniel Traca, 2002. "Imports-as-competitive-discipline: the role of the productivity gap," ULB Institutional Repository 2013/9233, ULB -- Universite Libre de Bruxelles.
    14. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    15. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
    16. Crespi, Gustavo Atilio & Katz, Jorge & Stumpo, Giovanni & Benavente H., José Miguel, 1996. "Changes in the industrial development of Latin America," Revista CEPAL, United Nations Economic Commission for Latin America and the Caribbean (ECLAC), December.
    17. repec:idb:brikps:8551 is not listed on IDEAS
    18. de Fontenay, Catherine C., 2004. "The dual role of market power in the Big Push: from evidence to theory," Journal of Development Economics, Elsevier, vol. 75(1), pages 221-238, October.
    19. Helen Shapiro, 2003. "Bringing the firm back in," Chapters, in: Development Economics and Structuralist Macroeconomics, chapter 13 Edward Elgar.
    20. Shapiro, Helen & Taylor, Lance, 1990. "The state and industrial strategy," World Development, Elsevier, vol. 18(6), pages 861-878, June.
    21. Henry J. Bruton, 1998. "A Reconsideration of Import Substitution," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 903-936, June.
    22. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    23. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," CEPR Discussion Papers 4767, C.E.P.R. Discussion Papers.
    24. repec:cup:cbooks:9780521416405 is not listed on IDEAS
    25. Amsden, Alice H., 1994. "Why isn't the whole world experimenting with the East Asian model to develop?: Review of the East Asian miracle," World Development, Elsevier, vol. 22(4), pages 627-633, April.
    26. Garrido, Celso & Peres Núñez, Wilson, 1998. "Grandes empresas y grupos industriales latinoamericanos," Revista CEPAL, United Nations Economic Commission for Latin America and the Caribbean (ECLAC), December.
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