Industrial Policy for the Twenty-First Century
Open accessAbstract
Unlike what is commonly believed, the last two decades have not witnessed the twilight of industrial policy. Instead, incentives and subsidies have been refocused on exports and direct foreign investment, in the belief that these activities are the source of significant positive spillovers. The challenge in most developing countries is not to rediscover industrial policy, but to redeploy it in a more effective manner. This paper lays out an institutional framework for accomplishing this objective. A central argument is that the task of industrial policy is as much about eliciting information from the private sector on significant externalities and their remedies as it is about implementing appropriate policies. The right model for industrial policy is not that of an autonomous government applying Pigovian taxes or subsidies, but of strategic collaboration between the private sector and the government with the aim of uncovering where the most significant obstacles to restructuring lie and what type of interventions are most likely to remove them.
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- Authors
- Rodrik, D.
- Affiliations
- National Bureau of Economic Research (US)
- Corresponding author
- Rodrik, Dani
- ORCID
- Rodrik, Dani
- Venue
- SSRN Electronic Journal
- Publisher
- Elsevier BV
- Published
- 2004
- ISSN
- 1556-5068 (ISSN-L)
- OpenAlex
- W3124879925
- Cited by
- 1,623
- References
- 11
- Citations by year
- 2026: 96 · 2025: 91 · 2024: 72 · 2023: 64 · 2022: 68 · 2021: 118 · 2020: 107 · 2019: 80 · 2018: 102 · 2017: 89 · 2016: 78 · 2015: 75 · 2014: 77 · 2013: 75 · 2012: 62
- Type
- posted content
- Language
- en
- Open access
- green
- doi.org
- Locations
- SSRN Electronic Journal (acceptedVersion)
- Topics
- Social Sciences › Political Science and International Relations › Asian Industrial and Economic Development
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Industrial Development
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
- Keywords
- industrial policy, developing countries, export incentives, foreign direct investment, subsidies, spillover effects, externalities, institutional framework, industrial restructuring, Pigouvian tax
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Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
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