Post the 'Washington Consensus': economic governance and industrial strategies for the twenty-first century

Abstract

Recent events in the global economy have led to a growing dissatisfaction with the neo-liberal economic paradigm that has dominated economic policy over the last 30 years, and the increasing concentration of (and abuse of) economic power within the corporate sector that has ensued. However, amidst calls for a new approach to economic management, there is a danger that a new policy framework may overlook underlying economic governance structures that exist (and may evolve) within the economy. Such oversight has implications for development. This paper seeks to demonstrate that the long run efficacy of industrial strategy depends upon designing appropriate economic governance structures that serve the wider public interest. It does so by exploring past experiences of industrial strategy, drawing lessons from the USA, the UK, Japan, the third Italy and the emerging and transition economies. We also offer some suggestions for ways forward.