Is There a Case for Industrial Policy? A Critical Survey

Pack, Howard; Saggi, Kamal

Is There a Case for Industrial Policy? A Critical Survey

2006

Pack, Howard | Saggi, Kamal

What are the underlying rationales for industrial policy? Does empirical evidence support the use of industrial policy for correcting market failures that plague the process of industrialization? This article addresses these questions through a critical survey of the analytical literature on industrial policy. It also reviews some recent industry successes and argues that public interventions have played only a limited role. Moreover, the recent ascendance and dominance of international production networks in the sectors in which developing countries once had considerable success implies a further limitation on the potential role of industrial policies as traditionally understood. Overall, there appears to be little empirical support for an activist government policy even though market failures exist that can, in principle, justify the use of industrial policy.

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AGROVOC Keywords

accounting agriculture businesses capital formation capital market cities collaboration communication technology components computer hardware computer science computer software consumers developing countries development economics economic development economic policies electronics equilibrium exports fixed costs foreign investment free trade globalization government intervention gross domestic product growth models growth rate human capital industrial development industrialization information exchange information technology innovation institution instrument interest rates international bank international trade learning manufacturing marginal costs marketing monopoly national income networks new technology oligopoly perfect competition private sector production costs productivity property rights results satellite satellites silicon software development supply chains technicians technology transfer telecommunications trade protection uses vertical integration wages welfare economics world trade organization wto

Bibliographic information

Publisher

Oxford University Press on behalf of the World Bank

Other Subjects

Underlying problem; Targets; Global trade; R& E-mail address; Televisions; Asymmetric information; Y2k; Constant returns to scale; San; Government policy; Software exports; Opportunity cost; Inventions; Supply networks; Software industry; Foreign competition; Formal analysis; Host economy; Comparative advantage; Economic theory; Technical skills; Rate of return; Foreign markets; Information asymmetry; Externality; Search; New markets; International finance; Settlement procedure; Diminishing returns; Barriers to entry; Coordination failures; Outsourcing; Positive externalities; Adverse effect; Domestic market; Basic; Production efficiency; New technologies; Software programmers; Entry barrier; Telephone lines; Settlement; Business climate; Time period; Capital markets; Technical infrastructure; Trading system; International economics; Buyer; Competition policy; Market distortions; Productivity growth; Foreign direct investment; Banking sector; Financial crises; Host countries; Intensive growth; Intellectual property; Analog; Global capital; Market failure; Trading; Dynamic analysis; Externalities; International development; Codes; Transmission; Political economy; Real time; Tax subsidies; Trade policy; Investing; Computer systems; Inputoutput; Stock markets; Directed credit; High technology; Entry barriers; Competitiveness; User interface; Government interventions; Corporate tax rates; Increasing returns to scale; Computer software industry; Investment decisions; Programming; Telecommunication; Trade regimes; Financial crisis; Potential investors; Open economy; Industry association; Economies of scope; Gross domestic product growth; Technological learning; Total factor productivity; Increasing returns; Y2k problem; Global capital markets; Competitive advantage; Government subsidies; Financial sector; Electronics industry; Telecommunications infrastructure; Rent seeking; Capabilities; Catalytic role; Phones; Cellular phones; Automotive; Ram; Profit margin; Information industry; Tax; Foreign investors; Positive feedback; Coordination failure; Software engineering; Monopolistic competition; Telephone; Market failures; International standards; Implicit tax; Development bank; Host country; Portfolio; Development strategies; Production function; E-mail; Economies of scale; Total factor productivity growth; Infant industry argument; Computer technology; Exporter; Ldcs; Informational asymmetries; Credibility; Telecommunication infrastructure; Result; Technology transfers; Technology spillovers; Product categories; Investment climate; Automobile; Competitive market; Market economy; Tax incentives; Local market; Technological change; Barrier to entry; Networking

License

http://hdl.handle.net/10986/16393http://creativecommons.org/licenses/by-nc-nd/3.0/igoWorld BankCC BY-NC-ND 3.0 IGO

Type

Journal Article

In AGRIS since: 2014-09-15

Format: AGRIS AP

Data Provider

This bibliographic record has been provided by World Bank

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Links

DOI http://hdl.handle.net/10986/16393

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