TIPS Pietrobelli IND POLICY Gaborone 9 Dec 2008.pdf

Definitions of Industrial Policy• Traditionally (market failures approach): identify and remedydistortions that prevent competitive market functioning, e.g. taxesand subsidies.• Heavier and widespread interventions (in theory) fell in disreputein many countries, due to inefficiencies and waste. Yet, oftenremained in place.• Now a revival of respectability…: “….Policies that may promotethe overall productivity of an economy. It has been proposed tocall them productive development policies (PDPs). The finalobjective is to raise growth….(IADB and Rodriguez Clare, 2008).• Rodrik and Harvard group: “A policy to speed up the process ofstructural change towards higher productivity activities, ….. And toassist firms in their search and discovery processes for new linesof comparative advantage” (Hausmann, Rodrik, Sabel, 2008)• Micro­foundationsof industrial policy (Lall and others)c.pietrobelli@uniroma3.itCREI, University Roma Tre4