Industrial Policies After 2000
Industrial Policies after 2000 investigates industrial policy during a time of deregulation, privatization and a growing interest in small government. This book brings together scholarship from different countries, different institutional contexts, and di
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Introduction The central purpose of this chapter is to explore some of the theoretical issues involved in the analysis of industrial policy. In doing so, we start from the proposition that there is not (and probably never can be) a single coherent theory of industrial policy, but rather different theoretical perspectives on and aspects of industrial policy. It is a rather obvious (if not always acknowledged) point to say that the analysis of industrial policy and strategy has to deal with three interrelated elements, namely the analysis of the operation of a market economy which includes the nature of markets and of competition as well as of networks and industrial and spatial clusters, the nature of the State activity, and the role of specific policy instruments. The focus of this chapter is on the first two of those, and limitations of space preclude discussion of specific industrial policies. We also offer some remarks on the constraints imposed by globalization on the pursuit of industrial policy. W. Elsner et al. (eds.), Industrial Policies after 2000 © Kluwer Academic Publishers 2000
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INDUSTRIAL POLICIES AFTER 2000
Since there are differing analyses of the operation of markets and competition and differing views on the nature of State activity, the way is opened for many different theoretical perspectives on industrial economies and on a global scale; hence its characterization as "global policy". Indeed, even what may be regarded as industrial policy differs according to the particular analysis of the market and of the State adopted. Some would regard industrial policy as akin to that covering monopoly, merger and restrictive practices (and perhaps regulation of utilities). Others would interpret industrial policy (and often use the term industrial strategy rather than industrial policy) much more broadly to include policies on credit (e.g. selective credit, use of interest rates), on training and skill formation through to forms of indicative planning: in effect any policy instrument which is used to influence industrial performance and development. 1 It can be expected that what is perceived as industrial policy at any time and place will be much influenced by the prevailing economic orthodoxy as well as the more general perceptions of the roles of the market and of the State. This chapter takes the view that different forms of industrial policy can only be understood by reference to different views of competition and of the State. 2 There is some general association between the views which a person adopts on the nature of markets and competition with the views which that person has on the role of the State (e.g. there is a tendency for a neo-classical view of markets and competition to be combined with a regulatory State, as discussed below), but there is not usually any logical link. Much of the Anglo-Saxon analysis of industrial policy is predicated on an essentially neo-classical view of competition which views a large number of firms in and free entry into an industry as desirable. Actual indust
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