The Rejuvenation of Industrial Policy

This essay is about an important area in which there has been major rethinking -- industrial policy, by which the authors mean government policies directed at affecting the economic structure of the economy. The standard argument was that markets w...

Full description

Bibliographic Details
Main Authors: Stiglitz, Joseph E., Lin, Justin Yifu, Monga, Célestin
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
Online Access:http://documents.worldbank.org/curated/en/2013/09/18324250/rejuvenation-industrial-policy
http://hdl.handle.net/10986/16845
id okr-10986-16845
recordtype oai_dc
spelling okr-10986-168452021-04-23T14:03:32Z The Rejuvenation of Industrial Policy Stiglitz, Joseph E. Lin, Justin Yifu Monga, Célestin ADVERSE EFFECTS AGRICULTURE ALLOCATION ALLOWANCES ASYMMETRIC INFORMATION BANKRUPTCY BANKS BENCHMARKING BEST PRACTICES CAPITAL INVESTMENTS CLIMATE CLIMATE CHANGE COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS COUNTRY CASE DEBT DEREGULATION DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT GOALS DEVELOPMENT POLICY DEVELOPMENT STRATEGIES DEVELOPMENT STRATEGY ECONOMIC DEVELOPMENT ECONOMIC DIVERSIFICATION ECONOMIC EFFICIENCY ECONOMIC FUNCTIONS ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC POLICY ECONOMIC RESEARCH ECONOMIC STRUCTURE ECONOMIC STUDIES ECONOMIC THEORY ECONOMIC WELFARE EXCHANGE RATE EXCHANGE RATE POLICY EXPORTS EXTERNALITIES FEDERAL GOVERNMENT FINANCIAL AID FINANCIAL BURDEN FINANCIAL CRISIS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FREE MARKETS GLOBAL ECONOMY GOOD GOVERNANCE GROWTH RATES HIGH GROWTH IMPORT SUBSTITUTION INCOME INCOME LEVELS INDUSTRIAL DEVELOPMENT INDUSTRIAL POLICY INDUSTRIALIZATION INFANT INDUSTRY ARGUMENT INTEREST RATE INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL TRADE JOBS LAWS LEARNING LEGAL FRAMEWORK LEGAL FRAMEWORKS LOW-INCOME COUNTRIES MACROECONOMIC POLICIES MARGINAL COST MARKET ECONOMY MARKET FAILURE MARKET FAILURES MINISTER MONOPOLY OPPORTUNITY COST PER CAPITA INCOME POLICY PERSPECTIVE POLICY RESEARCH POLITICAL ECONOMY POLITICAL LEADERS PREFERENTIAL PREFERENTIAL ACCESS PRIVATIZATION PROCUREMENT PRODUCTION FUNCTION PUBLIC GOOD PUBLIC POLICIES PUBLIC POLICY RESOURCE ALLOCATION SCIENTISTS SMALL BUSINESS STATE ENTERPRISES STRUCTURAL CHANGE SUBSTITUTION TAX CODES TAX EXPENDITURES TECHNOLOGICAL INNOVATION TECHNOLOGICAL PROGRESS TECHNOLOGY TRANSFER TRADE POLICY TREASURY BILLS UNDERVALUED EXCHANGE RATE WAGES WORLD TRADE ORGANIZATION This essay is about an important area in which there has been major rethinking -- industrial policy, by which the authors mean government policies directed at affecting the economic structure of the economy. The standard argument was that markets were efficient, so there was no need for government to intervene either in the allocation of resources across sectors or in the choices of technique. And even if markets were not efficient, governments were not likely to improve matters. But the 2008-2009 global financial crisis showed that markets were not necessarily efficient and, indeed, there was a broad consensus that without strong government intervention -- which included providing lifelines to certain firms and certain industries -- the market economies of the United States and Europe may have collapsed. Today, the relevance and pertinence of industrial policies are acknowledged by mainstream economists and political leaders from all sides of the ideological spectrum. But what exactly is industrial policy? Why has it raised so much controversy and confusion? What is the compelling new rationale that seems to bring mainstream economists to acknowledge the crucial importance of industrial policy and revisit some of the fundamental assumptions of economic theory and economic development? How can industrial policy be designed to avoid the pitfalls of some of the seeming past failures and to emulate some of the past successes? What are the contours of the emerging consensus and remaining issues and open questions? The paper addresses these questions. 2014-02-03T21:45:28Z 2014-02-03T21:45:28Z 2013-09 http://documents.worldbank.org/curated/en/2013/09/18324250/rejuvenation-industrial-policy http://hdl.handle.net/10986/16845 English en_US Policy Research Working Paper;No. 6628 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ADVERSE EFFECTS
AGRICULTURE
ALLOCATION
ALLOWANCES
ASYMMETRIC INFORMATION
BANKRUPTCY
BANKS
BENCHMARKING
BEST PRACTICES
CAPITAL INVESTMENTS
CLIMATE
CLIMATE CHANGE
COMPARATIVE ADVANTAGE
COMPETITIVENESS
CONSUMERS
COUNTRY CASE
DEBT
DEREGULATION
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DEVELOPING WORLD
DEVELOPMENT ECONOMICS
DEVELOPMENT GOALS
DEVELOPMENT POLICY
DEVELOPMENT STRATEGIES
DEVELOPMENT STRATEGY
ECONOMIC DEVELOPMENT
ECONOMIC DIVERSIFICATION
ECONOMIC EFFICIENCY
ECONOMIC FUNCTIONS
ECONOMIC GROWTH
ECONOMIC IMPLICATIONS
ECONOMIC POLICY
ECONOMIC RESEARCH
ECONOMIC STRUCTURE
ECONOMIC STUDIES
ECONOMIC THEORY
ECONOMIC WELFARE
EXCHANGE RATE
EXCHANGE RATE POLICY
EXPORTS
EXTERNALITIES
FEDERAL GOVERNMENT
FINANCIAL AID
FINANCIAL BURDEN
FINANCIAL CRISIS
FINANCIAL MARKETS
FINANCIAL RESOURCES
FINANCIAL SECTOR
FOREIGN DIRECT INVESTMENT
FOREIGN EXCHANGE
FREE MARKETS
GLOBAL ECONOMY
GOOD GOVERNANCE
GROWTH RATES
HIGH GROWTH
IMPORT SUBSTITUTION
INCOME
INCOME LEVELS
INDUSTRIAL DEVELOPMENT
INDUSTRIAL POLICY
INDUSTRIALIZATION
INFANT INDUSTRY ARGUMENT
INTEREST RATE
INTERNATIONAL FINANCIAL INSTITUTIONS
INTERNATIONAL TRADE
JOBS
LAWS
LEARNING
LEGAL FRAMEWORK
LEGAL FRAMEWORKS
LOW-INCOME COUNTRIES
MACROECONOMIC POLICIES
MARGINAL COST
MARKET ECONOMY
MARKET FAILURE
MARKET FAILURES
MINISTER
MONOPOLY
OPPORTUNITY COST
PER CAPITA INCOME
POLICY PERSPECTIVE
POLICY RESEARCH
POLITICAL ECONOMY
POLITICAL LEADERS
PREFERENTIAL
PREFERENTIAL ACCESS
PRIVATIZATION
PROCUREMENT
PRODUCTION FUNCTION
PUBLIC GOOD
PUBLIC POLICIES
PUBLIC POLICY
RESOURCE ALLOCATION
SCIENTISTS
SMALL BUSINESS
STATE ENTERPRISES
STRUCTURAL CHANGE
SUBSTITUTION
TAX CODES
TAX EXPENDITURES
TECHNOLOGICAL INNOVATION
TECHNOLOGICAL PROGRESS
TECHNOLOGY TRANSFER
TRADE POLICY
TREASURY BILLS
UNDERVALUED EXCHANGE RATE
WAGES
WORLD TRADE ORGANIZATION
spellingShingle ADVERSE EFFECTS
AGRICULTURE
ALLOCATION
ALLOWANCES
ASYMMETRIC INFORMATION
BANKRUPTCY
BANKS
BENCHMARKING
BEST PRACTICES
CAPITAL INVESTMENTS
CLIMATE
CLIMATE CHANGE
COMPARATIVE ADVANTAGE
COMPETITIVENESS
CONSUMERS
COUNTRY CASE
DEBT
DEREGULATION
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DEVELOPING WORLD
DEVELOPMENT ECONOMICS
DEVELOPMENT GOALS
DEVELOPMENT POLICY
DEVELOPMENT STRATEGIES
DEVELOPMENT STRATEGY
ECONOMIC DEVELOPMENT
ECONOMIC DIVERSIFICATION
ECONOMIC EFFICIENCY
ECONOMIC FUNCTIONS
ECONOMIC GROWTH
ECONOMIC IMPLICATIONS
ECONOMIC POLICY
ECONOMIC RESEARCH
ECONOMIC STRUCTURE
ECONOMIC STUDIES
ECONOMIC THEORY
ECONOMIC WELFARE
EXCHANGE RATE
EXCHANGE RATE POLICY
EXPORTS
EXTERNALITIES
FEDERAL GOVERNMENT
FINANCIAL AID
FINANCIAL BURDEN
FINANCIAL CRISIS
FINANCIAL MARKETS
FINANCIAL RESOURCES
FINANCIAL SECTOR
FOREIGN DIRECT INVESTMENT
FOREIGN EXCHANGE
FREE MARKETS
GLOBAL ECONOMY
GOOD GOVERNANCE
GROWTH RATES
HIGH GROWTH
IMPORT SUBSTITUTION
INCOME
INCOME LEVELS
INDUSTRIAL DEVELOPMENT
INDUSTRIAL POLICY
INDUSTRIALIZATION
INFANT INDUSTRY ARGUMENT
INTEREST RATE
INTERNATIONAL FINANCIAL INSTITUTIONS
INTERNATIONAL TRADE
JOBS
LAWS
LEARNING
LEGAL FRAMEWORK
LEGAL FRAMEWORKS
LOW-INCOME COUNTRIES
MACROECONOMIC POLICIES
MARGINAL COST
MARKET ECONOMY
MARKET FAILURE
MARKET FAILURES
MINISTER
MONOPOLY
OPPORTUNITY COST
PER CAPITA INCOME
POLICY PERSPECTIVE
POLICY RESEARCH
POLITICAL ECONOMY
POLITICAL LEADERS
PREFERENTIAL
PREFERENTIAL ACCESS
PRIVATIZATION
PROCUREMENT
PRODUCTION FUNCTION
PUBLIC GOOD
PUBLIC POLICIES
PUBLIC POLICY
RESOURCE ALLOCATION
SCIENTISTS
SMALL BUSINESS
STATE ENTERPRISES
STRUCTURAL CHANGE
SUBSTITUTION
TAX CODES
TAX EXPENDITURES
TECHNOLOGICAL INNOVATION
TECHNOLOGICAL PROGRESS
TECHNOLOGY TRANSFER
TRADE POLICY
TREASURY BILLS
UNDERVALUED EXCHANGE RATE
WAGES
WORLD TRADE ORGANIZATION
Stiglitz, Joseph E.
Lin, Justin Yifu
Monga, Célestin
The Rejuvenation of Industrial Policy
relation Policy Research Working Paper;No. 6628
description This essay is about an important area in which there has been major rethinking -- industrial policy, by which the authors mean government policies directed at affecting the economic structure of the economy. The standard argument was that markets were efficient, so there was no need for government to intervene either in the allocation of resources across sectors or in the choices of technique. And even if markets were not efficient, governments were not likely to improve matters. But the 2008-2009 global financial crisis showed that markets were not necessarily efficient and, indeed, there was a broad consensus that without strong government intervention -- which included providing lifelines to certain firms and certain industries -- the market economies of the United States and Europe may have collapsed. Today, the relevance and pertinence of industrial policies are acknowledged by mainstream economists and political leaders from all sides of the ideological spectrum. But what exactly is industrial policy? Why has it raised so much controversy and confusion? What is the compelling new rationale that seems to bring mainstream economists to acknowledge the crucial importance of industrial policy and revisit some of the fundamental assumptions of economic theory and economic development? How can industrial policy be designed to avoid the pitfalls of some of the seeming past failures and to emulate some of the past successes? What are the contours of the emerging consensus and remaining issues and open questions? The paper addresses these questions.
format Publications & Research :: Policy Research Working Paper
author Stiglitz, Joseph E.
Lin, Justin Yifu
Monga, Célestin
author_facet Stiglitz, Joseph E.
Lin, Justin Yifu
Monga, Célestin
author_sort Stiglitz, Joseph E.
title The Rejuvenation of Industrial Policy
title_short The Rejuvenation of Industrial Policy
title_full The Rejuvenation of Industrial Policy
title_fullStr The Rejuvenation of Industrial Policy
title_full_unstemmed The Rejuvenation of Industrial Policy
title_sort rejuvenation of industrial policy
publisher World Bank, Washington, DC
publishDate 2014
url http://documents.worldbank.org/curated/en/2013/09/18324250/rejuvenation-industrial-policy
http://hdl.handle.net/10986/16845
_version_ 1764434676576944128