Role Of Industrial Policy Research Articles

Dynamic Comparative Advantage and the Search for a Coherent Industrial Policy in ASEAN

The linkages between industrial policy and trade policy are explored in this article. The experience of various developed and developing countries is cited, with particular emphasis upon ASEAN. The importance of a trade policy that enables industrial sectors to respond to changing comparative advantages is stressed and proposals are made ensuring better means of identifying the bases of comparative advantages in developing countries, using more homogeneous classes of factor endowments ?not only labour and capital generally, but human capital, physical capital, and informa tion-based endowments which can help to identify the probable evolution of industry structure in developing countries. If the role of industrial policy is to be coherent, it is argued that it should be complementary to trade policy, assisting adjustment and compensating for market failures which impede outward-oriented development strategy.

Industrial Policy and Non-policy in the United States

ABSTRACTIn the context of declining relative output and productivity there have been increasing calls for the American government to play a greater role in industrial policy in recent years. Traditionally, however, US government intervention has been ad hoc and reactive rather than planned and strategic. Regulation policy has rarely been linked to economic growth, and most recently has evolved in a policy context separate from and largely antagonistic to business. Direct and indirect government aid is largely a result of the lobbying activities of diverse economic interests operating in an open but fragmented policy system. Of the various industrial policy options open to federal governments only one, facilitative or positive adjustment policy, is politically and ideologically possible. Even this, however, will be difficult to implement in a pluralistic and fragmented political system.