The Renaissance of Industrial Policy: Developmentalism in the Era of Post Globalization

Abstract

Industrial policy lost legitimacy and disappeared in public discourse in the heyday of neoliberalism and Washington consensus. Recently, however, industrial policy is experiencing a renaissance in many parts of the world. There have appeared several forms of industrial policy in the academic literature that vary greatly with different conceptualizations of the state. Even within one type of state there may be multiple types of industrial policy. The discussions on industrial policy in the 1980s-1990s used to be dominated by the conceptualizations of the developmental state that emphasized promoting strategic industries and the social-protection state that focused on protecting sunset industries. Nevertheless, the three ongoing megatrends, the globalization reversal, technological revolution, and the great-power competition in the profound transformation of the postwar international order, plus the unique experience of the Chinese development in the past four decades, have presented us three other types of industrial policy, practiced by the entrepreneurial state, the market-facilitating state, and the competitiveadvantage building state. Industrial policy has indeed regained legitimacy, but it still faces many challenges. There will be a process of social construction in the future in which various state and societal actors redefine the scope and acceptable means of industrial policy.