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The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy
Author:
Reda Cherif
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Fuad Hasanov
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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 074
Language:
English
Publication Date:
26 Mar 2019
DOI:
https://doi.org/10.5089/9781498305402.001
ISBN:
9781498305402
ISSN:
1018-5941
Pages:
79
Keywords:
WP; private sector; government failure; learning by doing; Industrial policy; technology; innovation; growth; diversification; market share; physical capital; export intensity; document state intervention; government intervention; construction company; Exports; Manufacturing; Comparative advantage; Productivity; Income; East Asia; Africa
Legal-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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2019: Issue 074