The debate on industrial policies has long been polarized between proponents of government intervention and free-market advocates. Our recent work proposes a new approach.

The False Dichotomy#

Proponents argue for market failure correction and industry nurturing, while opponents warn of the inability of the government to “pick winners.”

A New Framework#

What the current literature overlooks is that effective industrial policies must simultaneously design pie-expanding “public good” policies with appropriate redistribution policies.

Applications#

We examine the efficacy of industrial policies in the agricultural, natural resource, and environmental sectors through several empirical examples.