Industrial Policies in OECD Countries: An Overview

Abstract

Since the financial economic crises of the early 1970s the debate about economic and industrial affairs has intensified everywhere with, in many countries,the focus of economic policy shifting from demand to supply side remedies. What is striking about the post-1974 pattern is the extent to which countries have diverged in economic performance. The results of attempts to explain these differences are contradictory both between and within academic disciplines, though there is general agreement that the microeconomic policies of government can, and in most cases have, affected economic performance. The objectives of the papers in this special issue are (1)to describe the nature of the industrial policy agenda in each country; (2) to describe the instruments available and the scale of assistance provided to industry directly or indirectly; (3) to provide an outline of the institutional and political context in which policy is formulated in each country. Three broad comparative conclusions can be drawn: (1) we should not be too dogmatic about inferring the preconditions (e.g. type of party competition or bureaucratic structure) for apparently ‘successful’ policies; (2) the pursuit of a coherent industrial strategy appears to depend on socio/political condition which have been present in some countries but absent in others, such as a broad acceptance among political elites on the need to play an active part in helping industry to adapt to change and the existence of good communications between political/bureaucratic and economic actors, including a broad acceptance by private investors of the need for government intervention ; (3) even in countries which meet these conditions, particular industrial strategies change over time, sometimes dramatically, though this suggests that these countries have a greater capacity to adapt to change, particularly in response to external events, than countries characterised by policy inertia or policy confusion.