The role of industrial policy: Japan’s experience

Mitsuhiro Kagami ()

Brazilian Journal of Political Economy, 1995, vol. 15, issue 1, 121-136

Abstract: There are two views on “industrial policy”, negative and positive. Negativeviews say the market mechanism is the best way to allocate resources efficiently. Thus, governmentpolicy with preferential treatment for a specific industry hinders this market forceand leads to a misallocation of resources. On the other hand, positive views say that stateintervention is necessary since market forces sometimes fail to allocate resources efficiently.Broadly speaking, this is an issue on relationships between the state and the market, or towhat extent we can rely on the “invisible hand” of Adam Smith. JEL Classification: L60; L52; N15.

Keywords: Industrial policy; economic development; market failure; economic history of Japan (search for similar items in EconPapers)
Date: 1995
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