Industrial policy and credible commitments

Robson Antonio Grassi ()

Brazilian Journal of Political Economy, 2008, vol. 28, issue 4, 678-697

Abstract: This paper analyses the question of the counterparts that governments should claim from firms and/or economic sectors supported by vertical industrial policy. This is a discussion that still have to advance because everything indicate that the set of current counterparts (goals of costs, productivity, exportation, etc) still may be increased and improved, what will facilitate the assessment of industrial policy execution by society and the verification of its efficacy in order to yielding more possibilities of economic growth for a country or region. To reinforce the commitment credibility of the agents supported by industrial policy, this paper proposes to maintain the counterparts meant before and that such agents will be stimulated to commit specific assets in their activities that are supported by govern. It is shown that, without use more public resources than the used currently, this new counterpart may reinforce substantially the incentives that the firms supported by vertical industrial policy have it to execute the traditional counterparts assumed by them, and with it guarantee the best possible use of public resources. JEL Classification: L14; L52; O38.

Keywords: industrial policy; credible commitments; specific assets (search for similar items in EconPapers)
Date: 2008
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