The political economy of industrial policy: Structural interdependencies, policy alignment and conflict management

Abstract

Industrial policy is back in the mainstream debates. The paper provides a long-term analytical perspective of the industrial policy debate, and it critically assesses the current mainstream phase of the debate in light of three fundamental theoretical insights that developed along several decades of industrial policy theory and practice. These are related to the (i) structural interdependencies, tensions and dualism arising in the industrialisation process; (ii) variety and types of institutions for industrialisation and the importance of policy alignment; (iii) conflict management role of the government, alongside his entrepreneurial function, and the importance of government organisational capabilities. Building on this theoretical analysis, the last section of the paper provides a framework for the strategic coordination of packages of interactive industrial policy measures. The Policy Package Matrix is introduced as an operationalisation of the framework and a tool for effective industrial policy making.

Unlocking the potentials of Micro and Small Enterprises (MSEs) in building local technological capabilities in agro-processing industry

“…However, it is important to understand the complexities and the dynamic process involved in setting conditions for the development of innovation capabilities (Andreoni and Chang 2019). Complexities relate to the need for coordinating different institutions and policy instruments with each of them targeting directly one specific policy domain, while indirectly impacting several other policy domains.…”

“…Each policy domain characterises a relatively similar set of instruments or institutions aiming at one part of the industrial system. The dynamic process refers to the need for adjusting package of interactive measures over time by policy makers aimed at maintaining institutional complementarities and policy alignment (Andreoni and Chang 2019).…”

The architecture and dynamics of industrial ecosystems: diversification and innovative industrial renewal in Emilia Romagna

“…However, linking production/ISs studies to political economy analysis is a fundamental condition for the formulation of feasible industrial policies, as the distribution of power among organisations (and networks of powerful organisations) is unequal and policies have to govern conflicting interests, especially in systems in transition (Andreoni and Chang, 2019).…”

“…While these approaches are appealing, they might also be misleading, especially at the regional and country levels. First, co-location does not imply a 'genuine relatedness amongst agents, technologies, firms and sectors in a spatial context' (Kogler, 2017); secondly, relatedness is not symmetrical, in fact there is likely to be asymmetry (Boschma, 2017); third, it does not inform us about the nature of these alleged relationships, thus, they are not actionable from an industrial policy perspective (Andreoni and Chang, 2019). Finally, while the principle of similarity is a powerful focusing device, its exclusive use might limit our understanding of 'unrelated' diversification, that is, one requiring new capabilities/resources (Saviotti and Frenken, 2008).…”

Uma comparação das políticas industriais brasileiras a partir de Matrizes de Políticas Industriais

“…Política industrial vem sendo alvo de discussão na agenda de governos ao redor do mundo desde há pelo menos dois séculos (ANDREONI;CHANG, 2018). Devido ao grande intervalo de tempo, as discussões sobre como implementar políticas industriais e qual o papel do Estado nesta implementação também evoluíram bastante e foram alvos de diversas discussões teóricas (CHANG, 1994;CIMOLI et al, 2007).…”