The Case for Industrial Policy: A Critical Survey

51 Pages Posted: 20 Apr 2016

See all articles by Howard Pack

Howard Pack

University of Pennsylvania - Management Department; University of Pennsylvania - Business & Public Policy Department

Kamal Saggi

Southern Methodist University (SMU) - Department of Economics

Date Written: 02/01/2006

Abstract

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? To address these questions, the authors provide a critical survey of the analytical literature on industrial policy. They also review some recent industry successes and argue that only a limited role was played by public interventions. Moreover, the recent ascendance of international industrial networks, which dominate the sectors in which less developed countries have in the past 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.

Keywords: Economic Theory & Research, ICT Policy and Strategies, Water and Industry, Industrial Management, Markets and Market Access

Suggested Citation

Pack, Howard and Saggi, Kamal, The Case for Industrial Policy: A Critical Survey (02/01/2006). World Bank Policy Research Working Paper No. 3839, Available at SSRN: https://ssrn.com/abstract=922965

Howard Pack (Contact Author)

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

University of Pennsylvania - Business & Public Policy Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

Kamal Saggi

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States
214-768-3274 (Phone)
214-768-1821 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
623
Abstract Views
2,728
rank
54,143
PlumX Metrics