The New Economics of Industrial Policy

Réka Juhász, Nathaniel Lane and Dani Rodrik

No 31538, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We discuss the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational problems. On the whole, the recent crop of papers offers a more positive take on industrial policy. We review the standard rationales and critiques of industrial policy and provide a broad overview of new empirical approaches to measurement. We discuss how the recent literature, paying close attention to measurement, causal inference, and economic structure, is offering a nuanced and contextual understanding of the effects of industrial policy. We re-evaluate the East Asian experience with industrial policy in light of recent results. Finally, we conclude by reviewing how industrial policy is being reshaped by a new understanding of governance, a richer set of policy instruments beyond subsidies, and the reality of deindustrialization.

JEL-codes: L5 (search for similar items in EconPapers)
Date: 2023-08
New Economics Papers: this item is included in nep-his, nep-ltv and nep-pke
Note: DEV ITI POL PR
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Published as Réka Juhász & Nathan Lane & Dani Rodrik, 2024. "The New Economics of Industrial Policy," Annual Review of Economics, .

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Related works:
Journal Article: The New Economics of Industrial Policy (2024)
Working Paper: The New Economics of Industrial Policy (2023)
Working Paper: The New Economics of Industrial Policy (2023)
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