Once deemed a costly failure, industrial policy is making a return – led by China
A shift in governments’ attitudes towards state intervention is inaugurating a new era of economic planning
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FOR decades, state-led industrial policy had been largely discredited as a costly failure – with the exception of the so-called “Asian Tigers”.
The World Bank’s 1993 report on the so-called “East Asian miracle”, for instance, asserted that the prerequisites needed to repeat the successes of places such as Singapore, South Korea, Hong Kong and Taiwan – macroeconomic stability and low inflation – are “so rigorous that policymakers seeking to follow similar paths in other developing economies have often met with failure”.
Today, the World Bank has acknowledged that its previous advice has not held up. So much so, in fact, that it launched a new publication in March titled Industrial Policy for Development: Approaches in the 21st Century.
