Industrial Policy

Steve Coulter

Description

Well-designed industrial policies can improve a nation’s economic performance. Using a range of tools, such as subsidies, tax incentives, infrastructure development, protective regulations, and R&D support, governments are able to support specific industries or economic activities.

Steve Coulter examines the patterns of industrial policymaking across late capitalist societies. Drawing on case studies from a range of countries, each with different growth models, national capabilities, policy traditions, and political/welfare state regimes, he is able to offer a nuanced comparative assessment of states’ responses to specific economic challenges. The book draws broad conclusions about the trajectories of industrial policy and highlights key technical and political drivers that policymakers consider when addressing whether best practice should centre on general or nationally-specific approaches. The book also focuses on fresh challenges and opportunities for industrial policy and questions the sustainability of current policy practice.

1. Introduction: industry, economy and industrial policy

2. States, markets and growth: the economics of industrial policy

3. Implementing industrial policy: the experiences of five countries

4. New horizons for industrial policy

5. Conclusion

Sujets

• R&D
• Economic Policy
• Public Policy
• Political Economy
• Political Science
• Industries
• Research and development
• General officer
• General
• Recherche et développement
• Industrie

Informations

• Publié par: Agenda Publishing
• Date de parution: 06 juillet 2023
• Nombre de lectures: 0
• EAN13: 9781788215381
• Langue: English
• Poids de l'ouvrage: 4 Mo

Extrait

The Economy | Key Ideas

ese short primers introduce students to the core concepts, theories and models, both new and established, heterodox and mainstream, contested and accepted, used by economists and political economists to understand and explain the workings of the economy.

Austerity John Fender Behavioural Economics Graham Mallard Bounded Rationality Graham Mallard Cultural Economics Christiane Hellmanzik Degrowth Giorgos Kallis

Economic Anthropology James G. Carrier

Financial Inclusion Samuel Kirwan

The Gig Economy Alex De Ruyter and Martyn Brown Industrial Policy Steve Coulter The Informal Economy Colin C. Williams The Living Wage Donald Hirsch and Laura Valade z-Martinez Marginalism Bert Mosselmans Productivity Michael Haynes The Resource Curse S. Mansoob Murshed

© Steve Coulter 2023

This book is copyright under the Berne Convention. No reproduction without permission. All rights reserved.

First published in 2023 by Agenda Publishing

Agenda Publishing Limited PO Box 185 Newcastle upon Tyne NE20 2DH www.agendapub.com

ISBN 978-1-78821-110-9 (hardcover) ISBN 978-1-78821-338-7 (paperback)

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library

Typeset by JS Typesetting Ltd, Porthcawl, Mid Glamorgan Printed and bound in the UK by 4edge

Contents

1 2 3 4 5

Preface and acknowledgements

Introduction: industry, economy and industrial policy States, markets and growth: the economics of industrial policy Implementing industrial policy: the experiences of five countries New horizons for industrial policy Conclusion

Further reading References Index

Preface and acknowledgements

is book is intended as a brief, but hopefully interesting and informative, guide to industrial policy for students, academics and policymakers. As such, it covers the main economic theories relevant to the topic, but also shows how policies have been, and can be, applied in concrete settings to tackle a host of familiar economic challenges as well as emerging ones like decarbonization. Although at times controversial, almost every economically successful country became so through deploying industrial policies at some point or other, whether their governments admit to doing so or not. Examining how such interv entions are done, in particular policy domains, and by different countries at different time s, is therefore an important and useful exercise. Being a short book that tries to cover a lot, there are necessarily some gaps in coverage. I have mainly focused on the policies and strategies of relatively advanced countries in Europe, North America and East Asia, as these have mostly g one through the early stages of industrialization and now face common problems of a djusting to an increasingly technologically sophisticated future. is unfortunately means glossing over the challenges of how low-income countries can achieve initial industrial take-off. I would like to thank my publisher at Agenda, Aliso n Howson, and several reviewers, especially Bob Hancké, who provided valuable feedba ck at various stages, although any errors are mine alone. David Britto provided valuab le help with some of the data and charts. The book itself is fondly dedicated to Sunita and Lucas.

1 Introduction: industry, economy and industrial policy

equestion of the government’s role in market societies has loomed large since at least Adam Smith’s day. ere is a wide political and academic consensus today that well-designed economic policies delivered by the state or its agents can increase the well-being of societies through higher growth rates and greater efficiency. However, it is not always clear what these policies are, or should be, and how they can be put into effect. is book explores some of these economic and policy questions through an examination of one particular strand of economic policymaking known as “industrial policy”. Industrial policy is a distinct policy domain which includes a wide rang e of measures aimed at developing productive and technological capabilities in industry and related sectors, building and supporting new industries, and increasing the productivity and competitiveness of the economy generally. Industrial policies are separate from macroeconomic policy, which is concerned with the broad balance and direction of whole economies through tools like interest rates. But they are not necessarily synonymous with microeconomic policies either, as they can be directed at altering the structure of the productive sector of the economy by nudging domestic industries towards certain activities and developing broad attributes, such as higher productivity or greater R&D intensity. Depending on circumstances, the objectives of indus trial policy can include export promotion, development of linkages between firms in an industry and support for upstream technology development. Policy tools for achieving these objectives can include infrastructure spending, tax incentives for R&D, creation of intermediary institutions such as institutes for applied technology, vocational training programmes focused on high-technology, and direct intervention to protect or promote specific industries and even individual firms. Done successfully, industrial policy can have a significant effect on economic well-being. Britain, the industrial pioneer, used industrial po licies to nurture and guide its nascent manufacturing industries from the mid-eighteenth century (contrary to persistent myths that its industrial take-off was an entirely free-market affair; seeFigure 1.1). South Korea went from being one of the world’s poorest countries in the 1950s to an advanced industrial nation in little more than 30 years through judicious use of industrial policy to develop its economy through planned, export-led growth. France used industrial policies to rebuild aer the Second World War by developing global leadership in industrial sectors like high-speed rail and nuclear power. And the ostensibly free-market USA has long used industrial policy to transfer and diffuse technologies from its enormous defence sector to its private sector. In fact, most, if not all, rich countries have successfully employed industrial policy at various stages in their economic development – whether they admit to doing it or not. But the results overall have been mixed. Numerous historical and empirical studies show that governments can influence the growth rate of national or regional economies through such measures. Ha-Joon Chang argues that advanced nations in North America and Europe used industrial policy to catch up on Britain in the years following its industrial revolution in the eighteenth century. e Asian “tiger” economies such as Japan and South Korea then used industrial policy to develop their economies aer the Second World War, with spectacular and far-reaching success (Chang 2003).