Economic Development by Giugale Marcelo M
Author:Giugale, Marcelo M. [Giugale, Marcelo M.]
Language: eng
Format: epub, azw3, mobi
Publisher: Oxford University Press, USA
Published: 2014-01-14T00:00:00+00:00
5
SECTORS
WHAT MINISTERS WILL WORRY ABOUT—OR SHOULD
Can Governments Create Industries?
It is an old debate. Back in the 1950s and 1960s, from Asia to Latin America, an idea caught fire among development economists: governments should try to create industries. Typically, civil servants would pick industries that could employ lots of people or substitute imports, required huge upfront investments, were considered strategic, or just smacked of modernity. Those industries were then treated like “infants”—in need of all kinds of support until they could survive on their own. They were given tax breaks, protection from foreign competitors, cheap credit, subsidized energy, public contracts, even capital injections courtesy of the taxpayers. Think of toys, trucks, refrigerators, cement, steel, and petrochemicals—they were all going to be produced locally, whatever it took. (If you are over 50 and grew up in a developing country, fond memories of your family’s car or TV set are surely coming to your mind: it carried a national brand, cost a fortune, and broke down all the time.)
The experiment ended in tears. Yes, there were a few successes in East Asia that astonished naysayers. (Legend has it that one of the world’s leading banks told Japan in the 1960s that it would never be competitive at making cars.) But in most cases, the infants failed to grow and dragged the economy down with them. Consumers were saddled with lower-quality products at higher prices, banks with unpaid loans, and governments with covering the losses of uncompetitive companies, year after year. Corruption added an ugly veneer to the whole thing—after all, you were giving away benefits to a chosen few. By the late 1980s, countries were busy selling off their public enterprises, opening their economies, and letting markets decide what was produced where. That, we thought, would be the last we would hear about “industrial policy.”
Well, you’d be surprised. Today, developing countries rich in oil, gas, or minerals are desperately looking for policies to diversify their economies, not just because the price of natural resources could unexpectedly tank, but because the business of extraction does not create enough jobs. They have money to invest—think Africa. Even in countries that are doing well, governments are searching for ways to make their industries more high-tech and avoid being trapped halfway up the technological ladder—think Brazil.1 But everyone wants a new—read, smarter—industrial policy, one that avoids the mistakes of the past. They just might be onto something.
To start with, new industrial policy is not about bureaucrats picking products to manufacture domestically. If anything, it is about the private sector pointing out to policymakers the obstacles that make it unable to sell abroad—from a flickering electricity supply to corrupt customs officials. Far from closing the economy, the goal is to join the global market. Enterprises remain private. Everyone in the industry can compete for public support; it is not a privilege given to a favored firm or businessman. When public money is involved, it is mainly to improve logistics, infrastructure, or technology. Obviously, regulations that restrict trade are done away with first.
Download
Economic Development by Giugale Marcelo M.azw3
Economic Development by Giugale Marcelo M.mobi
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.
International Integration of the Brazilian Economy by Elias C. Grivoyannis(56991)
The Radium Girls by Kate Moore(10884)
Turbulence by E. J. Noyes(7015)
Nudge - Improving Decisions about Health, Wealth, and Happiness by Thaler Sunstein(6613)
The Black Swan by Nassim Nicholas Taleb(6162)
Pioneering Portfolio Management by David F. Swensen(5587)
Rich Dad Poor Dad by Robert T. Kiyosaki(5120)
Zero to One by Peter Thiel(4797)
Man-made Catastrophes and Risk Information Concealment by Dmitry Chernov & Didier Sornette(4703)
Secrecy World by Jake Bernstein(3764)
Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance by Janet Gleeson(3555)
Skin in the Game by Nassim Nicholas Taleb(3437)
The Age of Surveillance Capitalism by Shoshana Zuboff(3397)
The Money Culture by Michael Lewis(3264)
Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb(3248)
The Dhandho Investor by Mohnish Pabrai(3155)
Bullshit Jobs by David Graeber(3149)
The Wisdom of Finance by Mihir Desai(3062)
Blockchain Basics by Daniel Drescher(2868)