Abstract
Chapter 7 discussed four types of industry policy. The laissez-faire and supportive approaches essentially view the role of the government as reinforcing the operation of market forces. The active and planning approaches argue for considerable government intervention in the operation of industry. Whichever approach is adopted, industry policy will typically be implemented in four main areas: competition policy, regional policy, innovation policy, and trade policy.These policies can have wide-ranging effects on the operation of individual firms or particular industries — and, consequently, on economic welfare. Although economic theory can provide neither a rationale nor a justification for many of the measures implemented, it is still important to gauge their impact, even where such evaluation can be only qualitative.
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