Rethinking Productive Development: Sound Policies and Institutions for Economic Transformation
Industrial policy has often done more harm than good. The new conceptual framework presented in this book enables countries to adopt the productive development policies necessary to prosper while avoiding the mistakes of the past. The book rethinks productive development by examining the market failures impeding transformation and the government failures that may make the policy remedies worse than the market illness. Using a simple conceptual framework based on the scope and nature of the policy approach, the authors systematically analyze country policies in key areas such as innovation, new firms, financing, human capital, and internationalization. Recognizing that even the best policies will fail without the technical, organizational, and political capacity to implement them, the book concludes with ideas on how to design institutions with the right incentives, grow public sector capabilities over time, and foster constructive public-private collaboration.