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Is Industrial Policy Relevant in the 21st Century?

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Is Industrial Policy Relevant in the 21st Century?
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156
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Product Information
Author/Editor: Mehdi Shafaeddin
New Pb 72 pp.
Subject: Economics
Condition: Good

The author argues, in this study, that in recent decades the need for industrial policy in developing countries has increased because of globalisation and the evolving nature of the world economy. This is because international production and trade have become increasingly dominated by large transnational corporations, technological innovation has accelerated and production has become more knowledge-intensive. Yet, developing-country governments' capacity to promote the entry of domestic firms into this competitive environment has been eroded. It has been eroded by international trade rules and conditionalities imposed by international financial institutions and bilateral donors which have, in turn, been influenced to a large extent by the prevailing neoliberal orthodoxy. The neoliberals advocate that industrial policy has no place in economic development; trade and industrial development should be left to the operation of market forces.

This study contends that the neoliberal approach is seriously flawed. The policies of universal, across-the-board and premature trade liberalisation dictated under this approach suffer from several theoretical shortcomings, which have been borne out in the actual experience of developing countries in recent years. Neither does the experience of successful early industrialisers support the neoliberal hypothesis on trade liberalisation.
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