The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy

March 26, 2019

Preview Citation

Format: Chicago

Reda Cherif, and Fuad Hasanov. The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy, (USA: International Monetary Fund, 2019) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Industrial policy is tainted with bad reputation among policymakers and academics and is often viewed as the road to perdition for developing economies. Yet the success of the Asian Miracles with industrial policy stands as an uncomfortable story that many ignore or claim it cannot be replicated. Using a theory and empirical evidence, we argue that one can learn more from miracles than failures. We suggest three key principles behind their success: (i) the support of domestic producers in sophisticated industries, beyond the initial comparative advantage; (ii) export orientation; and (iii) the pursuit of fierce competition with strict accountability.

Subject: Comparative advantage, Economic sectors, Exports, Income, International trade, Manufacturing, National accounts, Production, Productivity

Keywords: Africa, Comparative advantage, Construction company, Diversification, Document state intervention, East Asia, Export intensity, Exports, Government failure, Government intervention, Growth, Income, Industrial policy, Innovation, Learning by doing, Manufacturing, Market share, Physical capital, Private sector, Productivity, Technology, WP

Publication Details

Pages:

79
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/074
Stock No:

WPIEA2019074
ISBN:

9781498305402
ISSN:

1018-5941

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