Industrial Policy, Information, and Government Capacity

Governments are resource- and bandwidth-constrained, and hence need to prioritize productivity-enhancing policies. To do so requires information on the nature and magnitude of market failures on the one hand, and government's capacity to redress them successfully on the other. This article revi...

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Main Authors:	Maloney, William F., Nayyar, Gaurav
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2020
Subjects:	INDUSTRIAL POLICY MARKET FAILURE GOVERNANCE ELITE CAPTURE COMPETITION POLICY
Online Access:	http://hdl.handle.net/10986/33273

id	okr-10986-33273
recordtype	oai_dc
spelling	okr-10986-332732021-05-25T10:54:40Z Industrial Policy, Information, and Government Capacity Maloney, William F. Nayyar, Gaurav INDUSTRIAL POLICY MARKET FAILURE GOVERNANCE ELITE CAPTURE COMPETITION POLICY Governments are resource- and bandwidth-constrained, and hence need to prioritize productivity-enhancing policies. To do so requires information on the nature and magnitude of market failures on the one hand, and government's capacity to redress them successfully on the other. This article reviews perspectives on vertical (sectoral) and horizontal (factor markets, cluster) policies with a view to both criteria. We first argue that the case for either vertical or horizontal policies cannot be made on the basis of the likelihood of successful implementation: for instance, educational policies and “picking the winner” types of policies both run the risks of capture and incompetent execution. However, the economics profession has been able to establish more convincing market failures for horizontal policies than for vertical policies. Most of the recent approaches to identifying failures around particular goods are of limited help. Hence, for a given difficulty of execution, the former are generally preferred. A second critical message is that improving the quality of governance in terms of collecting information, coordination ability, and defending against capture is critical to the successful implementation of productivity policies and should be central on the policy agenda. 2020-02-03T18:25:23Z 2020-02-03T18:25:23Z 2018-08 Journal Article World Bank Research Observer 1564-6971 http://hdl.handle.net/10986/33273 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	INDUSTRIAL POLICY MARKET FAILURE GOVERNANCE ELITE CAPTURE COMPETITION POLICY
spellingShingle	INDUSTRIAL POLICY MARKET FAILURE GOVERNANCE ELITE CAPTURE COMPETITION POLICY Maloney, William F. Nayyar, Gaurav Industrial Policy, Information, and Government Capacity
description	Governments are resource- and bandwidth-constrained, and hence need to prioritize productivity-enhancing policies. To do so requires information on the nature and magnitude of market failures on the one hand, and government's capacity to redress them successfully on the other. This article reviews perspectives on vertical (sectoral) and horizontal (factor markets, cluster) policies with a view to both criteria. We first argue that the case for either vertical or horizontal policies cannot be made on the basis of the likelihood of successful implementation: for instance, educational policies and “picking the winner” types of policies both run the risks of capture and incompetent execution. However, the economics profession has been able to establish more convincing market failures for horizontal policies than for vertical policies. Most of the recent approaches to identifying failures around particular goods are of limited help. Hence, for a given difficulty of execution, the former are generally preferred. A second critical message is that improving the quality of governance in terms of collecting information, coordination ability, and defending against capture is critical to the successful implementation of productivity policies and should be central on the policy agenda.
format	Journal Article
author	Maloney, William F. Nayyar, Gaurav
author_facet	Maloney, William F. Nayyar, Gaurav
author_sort	Maloney, William F.
title	Industrial Policy, Information, and Government Capacity
title_short	Industrial Policy, Information, and Government Capacity
title_full	Industrial Policy, Information, and Government Capacity
title_fullStr	Industrial Policy, Information, and Government Capacity
title_full_unstemmed	Industrial Policy, Information, and Government Capacity
title_sort	industrial policy, information, and government capacity
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2020
url	http://hdl.handle.net/10986/33273
_version_	1764478370289025024

Industrial Policy, Information, and Government Capacity

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