art13.pdf - Discussion Paper 4\/2011 Industrial Policy in Developing Countries Overview and lessons from seven country cases Tilman Altenburg Industrial

art13.pdf - Discussion Paper 4/2011 Industrial Policy in...

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Industrial Policy in Developing Countries Overview and lessons from seven country cases Tilman Altenburg Bonn 2011
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Discussion Paper / Deutsches Institut für Entwicklungspolitik ISSN 1860-0441 Die deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detail- lierte bibliografische Daten sind im Internet über abrufbar. The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed biblio- graphic data is available in the Internet at ISBN 978-3-88985-533-6 Tilman Altenburg , Economic Geographer, Deutsches Institut für Entwicklungspolitik (DIE) E-mail: [email protected] © Deutsches Institut für Entwicklungspolitik gGmbH Tulpenfeld 6, 53113 Bonn +49 (0)228 94927-0 ± +49 (0)228 94927-130 E-Mail:[email protected]
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Contents Abbreviations Summary 1 1 Introduction 7 2 Industrial policy – taking stock of recent debates 8 2.1 How much intervention in markets? 8 2.2 Governance issues 17 2.2.1 The ability and willingness of governments 17 2.2.2 Governance patterns: Markets, hierarchies, and networks 19 2.2.3 Networking and favouritism 19 2.2.4 Holding service providers accountable 20 2.2.5 Defining industrial policy management capability 21 2.3 Local and regional economic development: The spatial dimension of industrial policy 22 2.4 Resource efficiency: The big new challenge for industrial policy 26 2.5 Principles of successful industrial policy making 28 3 Industrial policy in low and lower-middle-income countries: Specific challenges 33 3.1 The context-specificity of industrial policy 34 3.2 Different policy conditions in low and lower-middle-income countries: Stylised facts 35 3.2.1 Different priorities in conditions of widespread poverty 36 3.2.2 Different constraints for industrial development 41 3.2.3 Different industrial policy management capabilities 46 3.2.4 Environmental challenges and opportunities for low and lower-middle- income countries 50 3.2.5 Donor influence in shaping industrial policy 53 3.2.6 Different external policy conditions 55 3.3 Do low and lower-middle-income countries need more or less active industrial policies – and what should they look like? 57 3.3.1 Market failure cum government failure - the basic dilemma 57 3.3.2 How can policy effectiveness be ensured and political capture minimised? 60 4 Stories of success and failure: Insights from seven comparative country case studies 61 4.1 Research design and selection of case studies 62 4.2 Mixed performance 64 4.3 Increasing recognition of the private sector as the engine of growth … 65
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4.4 … but state-business relationships are rarely collaborative and governments are unwilling to soften control of ‘strategic’ sectors 66 4.5 Understanding the political economy 68 4.6 Are ‘national transformation projects’ pursued? 70 4.7 Do countries engage in selective policies? 71 4.8 Planning vs. searching: How do countries develop new activities? 72 4.9 Fragmentation of business 74 4.10 Climate change mitigation and adaptation 76 4.11 Effectiveness of policy implementation 77 5
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