While researching on the new trends in industrial policy for some writing on the role played by the state in Asian growth and what lessons Sri Lanka can draw from it for its own efforts, I came across this cracker of a line that captures the challenge nicely,
“Focus now should be not on policy best practices, but rather on policy best matches with institutional capabilities”
Read the full article here: ‘Industrial Policy Reconsidered’ – http://www.project-syndicate.org/commentary/andres-velasco-makes-the-case-for-a-revival-of-government-action-to-promote-promising-economic-sectors
The author also refers to an interesting new set of policy tools that are a from the typical set of industrial policies as practised in East Asia. It is a new brand of “industrial policies”, called Productive Development Policies (PDPs). The idea is that rather than targeting specific sectors or industrial like in traditional industrial policies, these PDPs are sector-neutral, and productive capacity-enhancing policies. For instance, investing in transport infrastructure, training engineers, improving the standard of English in the workforce, etc. – inputs that stand to benefit a broad range of firms in different sectors to improve their competitiveness.
Need to read more about them, as they gradually take root in Latin America.