Abstract

http://ssrn.com/abstract=617544
 
 

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Industrial Policy for the Twenty-First Century


Dani Rodrik


Harvard University - Harvard Kennedy School (HKS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

November 2004

KSG Working Paper No. RWP04-047

Abstract:     
Unlike what is commonly believed, the last two decades have not witnessed the twilight of industrial policy. Instead, incentives and subsidies have been refocused on exports and direct foreign investment, in the belief that these activities are the source of significant positive spillovers. The challenge in most developing countries is not to rediscover industrial policy, but to redeploy it in a more effective manner. This paper lays out an institutional framework for accomplishing this objective. A central argument is that the task of industrial policy is as much about eliciting information from the private sector on significant externalities and their remedies as it is about implementing appropriate policies. The right model for industrial policy is not that of an autonomous government applying Pigovian taxes or subsidies, but of strategic collaboration between the private sector and the government with the aim of uncovering where the most significant obstacles to restructuring lie and what type of interventions are most likely to remove them.

Number of Pages in PDF File: 58

Keywords: Industrial Development

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Date posted: November 9, 2004  

Suggested Citation

Rodrik, Dani, Industrial Policy for the Twenty-First Century (November 2004). KSG Working Paper No. RWP04-047. Available at SSRN: http://ssrn.com/abstract=617544 or http://dx.doi.org/10.2139/ssrn.617544

Contact Information

Dani Rodrik (Contact Author)
Harvard University - Harvard Kennedy School (HKS) ( email )
79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-9454 (Phone)
617-496-5747 (Fax)
HOME PAGE: http://www.ksg.harvard.edu/rodrik/
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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