Transforming Economies: Making industrial policy work for growth, jobs and development
"This book helps connect the dots between economic theory, the role of capabilities, the lessons from history and the practical challenges of design and implementation of industrial policies. In so doing it provides an excellent policy roadmap for anyone interested in the challenge of promoting catch-up growth and productive transformation." Ricardo Hausmann, Director, Center for International Development, Harvard University
"This volume is a well-timed and comprehensive guide to how countries have used industrial policy to achieve structural transformation, raise productivity and create jobs. Crucially, the authors go beyond the sterile debate about whether governments “pick winners” and instead draw on a variety of analytical approaches to draw lessons and principles for successful industrial strategies."
- Ha-Joon Chang, University of Cambridge, author of Economics: The User’s Guide
Building on a description and assessment of the contributions of different economic traditions (neoclassical, structural, institutional and evolutionary) to the analysis of policies in support of structural transformation and the generation of productive jobs, this book argues that industrial policy goes beyond targeting preferred economic activities, sectors and technologies. It also includes the challenge of accelerating learning and the creation of productive capabilities. This perspective encourages a broad and integrated approach to industrial policy. Only a coherent set of investment, trade, technology, education and training policies supported by macroeconomic, financial and labour market policies can adequately respond to the myriad challenges of learning and structural transformation faced by countries aiming at achieving development objectives.
The book contains analyses of national and sectoral experiences in Costa Rica, the Republic of Korea, India, Brazil, China, South Africa, sub-Saharan Africa and the United States. Practical lessons and fundamental principles for industrial policy design and implementation are distilled from the country case studies. Given the fact that many countries today engage in industrial policy, this collection of contributions on theory and practice can be helpful to policy-makers and practitioners in making industrial policy work for growth, jobs and development.
Co-edited by UNCTAD.
Table of Contents
Introduction
- Latin American structuralism and production development strategies
José Antonio Ocampo - Making industrial policy work for development
Justin Yifu Lin and Volker Treichel - The role of industrial and exchange rate policies in promoting structural change, productivity and employment
Rodrigo Astorga, Mario Cimoli and Gabriel Porcile - A theory of capabilities for productive transformation: Learning to catch up
Irmgard Nübler - Industrial policy in the era of vertically specialized industrialization
William Milberg, Xiao Jiang and Gary Gereffi - Industrial development strategies in Costa Rica: When structural change and domestic capability accumulation diverge
Eva Paus - Skills development strategies and the high road to development in the Republic of Korea Byung You Cheon
- Building capabilities in the software service industry in India: Skill formation and learning of domestic enterprises in value chains
Manimegalai Vijayabaskar and M. Suresh Babu - Export sophistication, growth and the middle-income trap
Piergiuseppe Fortunato and Carlos Razo - Industrial policy as an effective development tool: Lessons from Brazil
João Carlos Ferraz, David Kupfer, Felipe Silveira Marques - The state and industrial policy in Chinese economic development
Dic Lo and Mei Wu - Industrial policy in a harsh climate: The case of South Africa
Nimrod Zalk - Kick-starting industrial transformation in sub-Saharan Africa
Tilman Altenburg and Elvis Melia - The paradox of US industrial policy: The development state in disguise
Robert H. Wade
Industrial policy, productive transformation and jobs: Theory, history and practice
José Manuel Salazar-Xirinachs, Irmgard Nübler and Richard Kozul-Wright
Part I. Productive transformation: Models and policies
Part II. Rethinking industrial development strategies: The capabilities dimension
Part III. Industrial policy in the making: Design and implementation