The Political Economy of Industrial Policy: Structural Interdependencies, Policy Alignment and Conflict Management

Andreoni, Antonio; Chang, Ha-Joon

Abstract

Industrial policy is back in the mainstream debates. The paper provides a long-term analytical perspective of the industrial policy debate, and it critically assesses the current mainstream phase of the debate in light of three fundamental theoretical insights that developed along several decades of industrial policy theory and practice. These are related to the (i) structural interdependencies, tensions and dualism arising in the industrialisation process; (ii) variety and types of institutions for industrialisation and the importance of policy alignment; (iii) conflict management role of the government, alongside his entrepreneurial function, and the importance of government organisational capabilities. Building on this theoretical analysis, the last section of the paper provides a framework for the strategic coordination of packages of interactive industrial policy measures. The Policy Package Matrix is introduced as an operationalisation of the framework and a tool for effective industrial policy making.

Citation

Andreoni, A., & Chang, H.-J. (2019). The Political Economy of Industrial Policy: Structural Interdependencies, Policy Alignment and Conflict Management. Structural Change and Economic Dynamics, 48, 136-150. https://doi.org/10.1016/j.strueco.2018.10.007

• Journal Article Type: Article
• Acceptance Date: Oct 26, 2018
• Online Publication Date: Oct 29, 2018
• Publication Date: Mar 1, 2019
• Deposit Date: Nov 1, 2018
• Publicly Available Date: Nov 1, 2018
• Journal: Structural Change and Economic Dynamics
• Print ISSN: 0954-349X
• Electronic ISSN: 1873-6017
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 48
• Pages: 136-150
• DOI: https://doi.org/10.1016/j.strueco.2018.10.007
• Keywords: Industrial policy, Structural interdependencies, Institutions for industrialisation, Policy alignment, Conflict management, Strategic coordination and Policy Package Matrix
• Related Public URLs: https://doi.org/10.1016/j.strueco.2018.10.007