The advance of the state and the renewal of industrial policy in the age of strategic competition

Abstract

Many developing countries have recently adopted a swathe of development strategies ranging from extremely selective to non-discretionary, functional policies – some if not all of which constitute what we may term ‘industrial policy’. The collection provides an overview on the state of the art about new industrial policy and the place of politics in contemporary analysis of state intervention in the global political economy. This introduction revisits the importance of state-backed economic policies not simply as a reaction to the limitations of market reforms implemented in the 1980s and 1990s, but as a radically new development strategy moving on to the twenty-first century. The task of the paper is two-fold: first, it maps out the lessons from East Asian industrial policy and demonstrates how a new generation of political economy scholars have brought in a more political approach to industrialisation; and second, it synthesises the political economy literature to build a framework that incorporates new aspects of industrial policy, notably on the significance of economic linkages and rent management as a way of addressing global value chains.