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Industrial Policy in Developing Countries

Failing Markets, Weak States Tilman Altenburg, Head of Department, Sustainable Economic and Social Development, German Development Institute and Wilfried Lütkenhorst, Associate Fellow, German Development Institute, Germany and Jingshi Principal Professor, Beijing Normal University, China
Against the backdrop of persistently high levels of poverty and inequality, critical environmental boundaries and increasing global economic interdependence, this book addresses the role and impact of industrial policies in developing countries. Accepting the reality of both market failure and policy failure, it identifies the conditions under which industrial policy can deliver socially desirable results. General conclusions on the political economy of development are complemented by country case studies covering Ethiopia, Mozambique, Namibia, Tunisia and Vietnam.
Extent: 232 pp
Hardback Price: $120.00 Web: $108.00
Publication Date: 2015
ISBN: 978 1 78100 025 0
Availability: In Stock
Paperback Price: $39.95 Web: $31.96
Publication Date: 2017
ISBN: 978 1 78643 983 3
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  • Development Studies
  • Development Economics
  • Development Studies
  • Economics and Finance
  • Development Economics
  • Industrial Economics
Industrial Policy in Developing Countries offers an in-depth assessment of both the potentials and perils of designing and implementing policy in countries at early stages of economic development. The range of insightful case studies illustrates the key dilemma: directing economic and social development through what are often incipient and weak institutions. This realistic, evidence-based assessment will appeal to both development researchers and industrial policy practitioners, particularly those working in developing countries.
‘Countries that need industrial policy the most typically have the worst governance. This terrific book explicitly recognizes this difficulty, and provides a rich discussion of how it can be overcome. It presents a valuable series of country studies that focus on both successes (such as Ethiopian cut flowers) and failures (such as Namibia’s export processing zones). The authors show that weak capacity is not necessarily a hindrance to effective industrial policy, just as strong capacity does not guarantee it.’
– Dani Rodrik, Harvard University, US

‘This is the book our students have been waiting for.’
– Hubert Schmitz, Institute of Development Studies and Founder of Sussex MA course Competing in the Global Economy

‘A green transformation holds the potential to sustain a healthy planet where ecosystems are well-managed and human well-being is secured for future generations. This book makes a compelling case for the design of industrial policies that support a green economy. Being at the crossroads of their development pathways, developing countries have the unique opportunity to define their industrial policies in a resource-efficient, low-carbon and socially inclusive manner in the context of the Post-2015 Development Agenda.’
– Director, Oxford Martin Institute, Oxford University, UK (former Executive Director UNEP)

‘Historically industrial policy has been conducted by nearly all countries as a way of getting ahead in the international arena. Many have succeeded but many have failed. African countries have particularly failed miserably, mainly because their embryonic governments tried to do too much with too little. The present book provides a refreshing and balanced guidepost for such governments to employ relatively appropriate strands of industrial policy while avoiding the past pitfalls. As such, the book fills an important void in the economic development literature.’
– Augustin K. Fosu, University of Ghana, University of Pretoria, South Africa and University of Oxford, UK

‘A timely reminder both of the necessity of industrial policy and why designing successful industrial policy is so challenging for developing countries. Green technologies, social inclusion concerns and the problems of weak governance and political constraints means that industrial policy has to be appropriate for very specific contexts and problems.’
Mushtaq Khan, SOAS, University of London, UK

‘This is both a why book and a how-to book. It brings together a wealth of firsthand experience, empirical evidence and institutional theory to forge a compelling argument for industrial policy (or “production transformation policy”), even where most parts of the state operate in a manner far from a Weberian bureaucracy. It is highly original, and an enjoyable read into the bargain.’
– Robert H. Wade, London School of Economics, UK and winner of the Leontief Prize in Economics, 2008


Contents: 1. Why this Book? 2. Societal Goals Ruling Markets 3. Industrial Policy for Social Inclusion 4. Industrial Policy for a Green Transformation 5. Governance and Governments: Balancing Market and State Failure 6. What is Special about Industrial Policy in Developing Countries? 7. Selected Developing Country Case Studies 8. Comparative Insights into Success and Failure 9. Rethinking Industrial Policy in Developing Countries Index