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Industrial Policy, Learning and Development

Stiglitz, Joseph E.

Industrial policies have played an important role in successful economic development in countries. Through these policies, governments intervene in the market’s sectoral allocation of resources and choice of technologies. Earlier industrial policies had a narrow remit and made use of a limited number of instruments. This chapter argues that governments should pursue broader objectives and use a wider range of instruments. In particular, it argues that ‘learning’ (including learning by doing and learning to learn) is central to development, that there are intrinsic market failures associated with learning, and that carefully crafted industrial policies can promote both learning and development.


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The Practice of Industrial Policy: Government-Business Coordination in Africa and East Asia
Oxford University Press

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April 15, 2019


Also published as WIDER Working Paper 2015/149, published by UNU-WIDER and the Korean International Cooperation Agency, Helsinki, Finland, December 2015.