The Political Economy of Industrial Policy

Réka Juhász and Nathaniel Lane

Journal of Economic Perspectives, 2024, vol. 38, issue 4, 27-54

Abstract: We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad "governance constraints": (1) the political forces that shape how industrial policy is chosen and (2) the ways in which state capacity affects implementation. The framework of modern political economy suggests that government failure is not a necessary feature of industrial policy; rather, it is more likely to fail when countries pursue industrial policies beyond their governance capacity constraints. As such, our political economy of industrial policy is not fatalist. Instead, it enables policymakers to constructively confront challenges.

JEL-codes: D72 D73 H23 L52 O25 Q54 Q58 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The Political Economy of Industrial Policy (2024)
Working Paper: The Political Economy of Industrial Policy (2024)
Working Paper: The Political Economy of Industrial Policy (2024)
Working Paper: The Political Economy of Industrial Policy (2024)
Working Paper: The Political Economy of Industrial Policy (2024)
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DOI: 10.1257/jep.38.4.27

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