Industrial policy is making a comeback in the United States. It is more urgent than ever to understand how and whether industrial policy has worked to strengthen the US economy. This study analyzes and scores 18 US industrial policy episodes implemented between 1970 and 2020, in an effort to assess what went right and what went wrong—and how the current initiatives might fare. These case studies can guide policymakers as they embark on what appears to be a major initiative in US government involvement in the economy today. The authors divide the 18 case studies into three broad categories: cases where trade measures blocked the US market or opened foreign markets, cases where federal or state subsidies were targeted to specific firms, and cases where public and private R&D was funded to advance technology. The outcome of each episode is scored by grading three criteria: (1) the effect on US competitiveness in global markets (or in some cases the national market), (2) whether the annual cost per job saved or created in the sector was reasonable (i.e., no more than the prevailing average wage), and (3) whether support advanced the technological frontier. Some of the episodes are partly or entirely successful while others are complete failures. Industrial policy can save or create jobs, but often at high cost. A major political selling point for industrial policy is to save or create jobs in a specific industry or location. In most cases, import protection does not create a competitive US industry, and it imposes extreme costs on household and business users per job-year saved. Trade policy concentrated on opening markets abroad is a better bet. Designating a single firm to advance technology yields inconsistent results. The highly successful model of Operation Warp Speed vividly demonstrates that competition is an American strength. R&D industrial policy has the best track record by far. Among the 18 cases, the Defense Advanced Research Projects Agency (DARPA) has the outstanding record.

Industrial policy is making a comeback in the United States. It is more urgent than ever to understand how and whether industrial policy has worked to strengthen the US economy. This study analyzes and scores 18 US industrial policy episodes implemented between 1970 and 2020, in an effort to assess what went right and what went wrong—and how the current initiatives might fare. The Peterson Institute for International Economics gratefully acknowledges the support of the Koch Foundation for this project.

Industrial policy was once so out of fashion that it was jokingly called “the policy that shall not be named.” Now it’s back in a big way. On issues ranging from clean energy to semiconductors to COVID-19, governments are trying to improve the performance of key business sectors. Can they manage to do so without subverting competition and subsidizing special interests?

This book examines EU and US bilateral trade and investment relations with China, their attempts to level the economic playing field and to narrow the ‘reciprocity gap’ in market openness. It explores the extent of EU and US policy change, the underlying factors accounting for this change and compares EU and US foreign economic policy answers to an adversary increasingly perceived as an unfair economic competitor and as a systemic rival. The book covers a broad range of policy areas from ‘trade wars’, trade defense instruments, their reform and use, investment screening, and export control to industrial policies. It makes eclectic use of different strands of International Relations, International Political Economy and Policy Analysis theorizing to account for the extent of, and differences in, the EU and US responses. The People’s Republic of China’s stellar economic and political rise combined with the resilience of its unfair trade practices, its reinforced authoritarian repression at home and its ever more assertive foreign (economic) policy has triggered a shift in perceptions of China, followed by equally profound policy change in the European Union and the US. This book expertly charts and explains this significant shift in stance. This book will be of key interest to scholars, students and practitioners in the fields of EU trade policymaking, US foreign/ foreign economic policy, EU-China-US economic relations, European political economy, and more broadly to European studies, Asian studies, International Relations, International Political Economy, and transatlantic relations.

The paper aims to provide a conceptual framework and guiding principles for the coverage of Industrial Policy (IP) in IMF surveillance. It proposes a working definition of industrial policy, discusses its objectives and main instruments, and provides a brief review of academic literature on IP. The paper discusses the four broad sets of considerations for assessing IP: justification, design, cost-benefit assessment, and implementation. It stresses that IP should be covered in IMF surveillance when it is deemed macro-critical and/or has the potential to generate significant cross-border spillovers. The paper also discusses specific aspects of industrial policies, including trade-related IP, green IP, Special Economic Zones (SEZs), and State-Owned Enterprises (SOEs), and provides examples of the IP coverage in the Article IV consultations with China, Euro Area, Indonesia, Saudi Arabia, and the United States.

Combining economic analysis with in-depth industry studies, the 2024 edition of the World Intellectual Property Report introduces a new data-driven methodology designed to help policymakers make informed decisions by leveraging existing local innovation capabilities and strengthen their national innovation ecosystems. Complementing this framework are three case studies across the agriculture technology, motorcycle and video game industries, spanning eight different countries. These studies demonstrate how countries have successfully carved out specialized trajectories within innovative and complex industries.

Development and Modern Industrial Policy in Practice provides an up-to-date analysis of industrial policy. Modern industrial policy refers to the set of actions and strategies used to favor the more dynamic sectors of the economy. A key aspect of moder

The world economy is experiencing a very strong but uneven recovery, with many emerging market and developing economies facing obstacles to vaccination. The global outlook remains uncertain, with major risks around the path of the pandemic and the possibility of financial stress amid large debt loads. Policy makers face a difficult balancing act as they seek to nurture the recovery while safeguarding price stability and fiscal sustainability. A comprehensive set of policies will be required to promote a strong recovery that mitigates inequality and enhances environmental sustainability, ultimately putting economies on a path of green, resilient, and inclusive development. Prominent among the necessary policies are efforts to lower trade costs so that trade can once again become a robust engine of growth. This year marks the 30th anniversary of the Global Economic Prospects. The Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.

Industrial policy has long been regarded as a strategy to encourage sector-, industry-, or economy-wide development by the state. It has been central to competitiveness, catching up, and structural change in both advanced and developing countries. It has also been one of the most contested perspectives, reflecting ideologically inflected debates and shifts in prevailing ideas. There has lately been a renewed interest in industrial policy in academic circles and international policy dialogues, prompted by the weak outcomes of policies pursued by many developing countries under the direction of the Washington Consensus (and its descendants), the slow economic recovery of many advanced economies after the 2008 global financial crisis, and mounting anxieties about the national consequences of globalization. The Oxford Handbook of Industrial Policy presents a comprehensive review of and a novel approach to the conceptual and theoretical foundations of industrial policy. The Handbook also presents analytical perspectives on how industrial policy connects to broader issues of development strategy, macro-economic policies, infrastructure development, human capital, and political economy. By combining historical and theoretical perspectives, and integrating conceptual issues with empirical evidence drawn from advanced, emerging, and developing countries, The Handbook offers valuable lessons and policy insights to policymakers, practitioners and researchers on developing productive transformation, technological capabilities, and international competitiveness. It addresses pressing issues including climate change, the gendered dimensions of industrial policy, global governance, and technical change. Written by leading international thinkers on the subject, the volume pulls together different perspectives and schools of thought from neo-classical to structuralist development economists to discuss and highlight the adaptation of industrial policy in an ever-changing socio-economic and political landscape.