Cover Departmental Papers
Industrial Policy for Growth and Diversification: A Conceptual Framework
Author:
Reda Cherif
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Fuad Hasanov
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Mr. Nikola Spatafora
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Rahul Girinull

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Dimitre Milkov
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Mr. Saad N Quayyum
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Mr. Gonzalo Salinas
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Mr. Andrew M. Warnernull

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Series:
Departmental Papers
Volume/Issue:
Volume 2022: Issue 017
Language:
English
Publication Date:
30 Sep 2022
DOI:
https://doi.org/10.5089/9798400214271.087
ISBN:
9798400214271
ISSN:
2616-5333
Pages:
31
Keywords:
Industrial Policy; Diversification; Economic Development; IMF team; Policy tool; policy failure; IMF Library; diversification strategy; Infrastructure; Tax incentives; Exports; East Asia; Global
Legal-disclaimer:
The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper 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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As countries strive for a strong recovery and to recoup the losses incurred during the COVID-19 pandemic, they need to map out a new path for development and high and sustained growth. Promoting diversification, developing new industrial capabilities, and designing the policies needed to achieve this goal should be a priority. A successful diversification strategy should tackle both broad policy failures, such as an unfavorable business environment and investment climate and sector-specific market failures. This departmental paper presents a conceptual framework to analyze industrial policy, defined as targeted sectoral interventions. The authors first discuss the key principles that should guide policymakers, that is, a focus on the market failures that could justify targeted sectoral interventions, as well as the potential government failures that can undermine these interventions. The authors then discuss some commonly employed policy tools, their rationale, and the associated pitfalls. Finally, the authors outline a stylized decision-making framework.
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Cover Departmental Papers
Departmental Papers
ISSN:
2616-5333
Publisher:
International Monetary Fund
Volume 2022: Issue 017