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Six Steps for Strategic Government Intervention
... Przez wiele lat trwał spór między ekonomistami na temat celu, zakresu oraz instrumentarium polityki przemysłowej, a także ich skuteczności i efektywności. Duża część dostępnej literatury jednoznacznie wskazuje na istotny wpływ prowadzonej polityki przemysłowej na wzrost i rozwój gospodarki (Arndt, 1987;Cimoni et al., 2009;Hirschman, 1958;Lin, 2010;Robinson, 2010;Shapiro 2007;Suzigan i Furtado, 2006). Zwolennicy interwencjonizmu zwracają uwagę na pozytywne konsekwencje w postaci wsparcia zmian technologicznych, poprawy struktury produkcyjnej na bardziej efektywną, jak też tworzenie nowych miejsc pracy (Aghion, et al., 2011;Krugman, 1987;Lin, 2012;Tomasso et al., 2017). ...
W ostatnich latach wystąpiły dwa zjawiska istotnie wpływające na dotychczasową koncepcję polityki przemysłowej zarówno w USA, jak i w UE: szybka ekspansja Chin oraz zewnętrzne szoki takie jak pandemia COVID-19 oraz wojna w Ukrainie. Na fali ujawnionego uzależnienia od dostawców azjatyckich w UE oraz w USA otwarto oficjalnie dyskusję na temat instrumentów zarówno protekcjonistycznych, jak i interwencjonistycznych. Celem niniejszego artykułu jest zidentyfikowanie podobieństw i różnic w narzędziach proponowanych przez USA i UE ukierunkowanych na zachęcanie przedsiębiorstw do inwestycji w czyste technologie oraz określenie kanałów wpływu na konkurencję na rynku międzynarodowym. W związku z tym dokonano analiz komparatystycznych źródłowych aktów prawa amerykańskiego i unijnego oraz dokumentów programowych USA i UE, a także dostępnych raportów i wstępnych opracowań instytucji finansowych i konsultingowych. Zrealizowane badanie pozwoliło stwierdzić, że cele, zakres oraz narzędzia finansowe polityki przemysłowej uległy zdecydowanej zmianie – opracowano nowe instrumenty subwencyjne w USA, w wielu przypadkach dyskryminacyjne wobec partnerów z państw trzecich, podczas gdy w istotny sposób złagodzono wcześniej restrykcyjne zasady wspierania krajowych przedsiębiorców w UE.
... This is the reasons why the foundation of industrial parks became a strategic priority in development policies in the 20th century (e.g. see: Kim, 1992;Lin, 1992;Lin, 2010). Moreover, thanks to its transformative power, industrial parks have become more apparent in the discussions on how to deal with the climate crisis after the 1990s (e.g. ...
This study analyses the transformation of industrial parks to eco-industrial parks from a new institutionalist theoretical perspective. The worsening climate crisis has made the existing Linear Economic (LE) system dysfunctional; thus, a need for systemic change has emerged across the globe. As a result of this need, the idea of Circular Economy (CE) has gained popularity. The CE particularly aims to replace the linearity in economic actions originating from the LE’s “take-make-use-dispose” logic with the circularity of economic actions constructed through a “recycle-reuse-reduce” logic. At this point, the transformation of industrial parks to eco-industrial parks in line with the CE principles constitutes a useful case to see how the idea of the CE can be institutionalized. The study argues that the market actors cannot effectively initiate this transformation due to their short-run interest calculations and path-dependence on the existing LE system. On the other hand, the state with its strong institutional power could play a catalyst role accelerating this transformation process. In particular, the state could provide regulative, financial, technological, and societal network support to the market actors to deal with their dependence on the LE system. However, the state should become entrepreneurial, but not interventionist in this process. It should have a horizontal governance approach and put infrastructural help, communication, networks and learning at the centre. This means that the state should become a path-opener but not the dominator of the mentioned transformation process. Therefore, rather than obsessive ideological debates over the state versus the market, the focal point should be the proper functionality of the state and market in the establishment of a sustainable circular system to cope with the worsening climate crisis.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
The Green Revolution has brought about a significant increase in agricultural productivity, expediting a shift in industrial structure. Although economic theories have been based on the dichotomy of agricultural and industrial sectors, the actual shift is more gradual. In this chapter, we discuss the role of upstream and downstream industries of agriculture in development strategy from the perspective of global value chains. We claim that agricultural processing and retail industries can integrate agricultural and industrial developments. In this regard, the model of cluster-based development is informative, and the role of human capital investment and associations is essential. We also provide an overview of the development of the tapioca industry in Thailand as an illustrative case study. This discussion ultimately aims to redefine agricultural development as a part of long-term economic development.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
More than half of the world’s population relies on wheat, maize, and rice for their daily dietary energy. In 2019, the daily per person average calorie intake was 2,963 kilocalories (kcal), in which the share was more than 18.2% (538 kcal) for wheat, 5.4% (159 kcal) for maize, and 18.3% (542 kcal) for rice. It is projected that by 2050, the total global population is expected to reach between 8.9 and 10.6 billion from 7.8 billion in 2020. Thus, it will be imperative to produce more wheat, maize, and rice to ensure the food security of the world’s burgeoning population. While it is imperative to produce more food, the emergence and re-emergence of lethal crop diseases and their spread from the epicenters to new regions continuously threaten crop yield, farmers’ income, and the world’s food security. For example, the emergence of maize lethal necrosis (MLN) in Africa has generated a credible threat to global and African food security. This study quantified MLN-induced maize production loss in Kenya, DR Congo, and Tanzania. Applying the time-series projection method, this study estimates that the loss in maize production due to MLN was 442 thousand tons in Kenya, nearly 12 thousand tons in DR Congo, and 663 thousand tons in Tanzania. As more pest- and disease-related crop losses are expected due to the changes in global climate, this study concludes by suggesting that it is imperative to invest more in research and development of disease-resistant crop varieties globally to ensure food and nutrition security, particularly in the global south.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
As forestland and grazing land grow scarcer and rural poverty persists in developing countries, sustainable natural resource management (NRM) for income generation and poverty reduction is imperative. Although securing property rights on forestlands is fundamental for sustainable resource management, the conditions under which one institution outperforms the others in the efficiency of forest management have not yet reached a consensus. In contrast, forest management under common property regimes (e.g., community forest management) is commonly adopted in developing countries in Asia and Africa. As argued by Ostrom, community forest management is effective in protecting forest resources, but it may fail to provide proper incentives for intensive forest management activities. This paper argues that the community management system performs efficiently for non-timber forests, whereas a mixed management system of private and common ownership is a desirable institution for timber forest management in developing countries. This empirical research conducted a randomized experiment in Ethiopia and confirmed that the mixed management system significantly stimulated intensive forest management activities, such as pruning, guarding, and watering.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
In developing countries, a substantial amount of perishable and often highly nutritious commodities, such as fruits and vegetables, are lost after harvest, mainly caused by the lack of key infrastructures, such as electricity and cold chain facilities. On the other hand, the world has recently seen the potential of solar power in decarbonizing economies and transforming rural livelihoods in developing countries. A new technology, such as solar power photovoltaics, is highly divisible and, therefore, can be easily introduced to overcome the lack of sustainable electricity supply. In 2020–2021, we implemented an intervention to rebuild rural livelihoods in conflict-affected northeast Nigeria by building solar-powered cold storage facilities that can reduce food loss and increase consumption of perishable, micronutrient-rich horticulture products; increase incomes of market agents and producers; and improve employment. The intervention brought a significant increase in the number of days that horticulture products remain fresh, market sales for cold storage users, and the amount of vegetables available to the local population. Cost-benefit analysis showed a significant net economic gain in the long-run. Our example shows that a technological innovation, which overcomes the lack of an essential investment for development, can trigger economic transformation.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
Rice-growing villages that look dormant under the shadow of mango trees have undergone a major transformation in their economies. Such transformation is accompanied by household income growth and poverty reduction. The first objective of this chapter is to describe the drivers of economic transformation in four villages (Kei’s villages) in the Philippines from simple rice-dependent economies to more complex ones characterized by diverse sources of livelihood. The drivers of these economic transformations are population pressure, new rice technology, land reform, investments in human capital, urbanization and commercialization, and infrastructure. The second objective is to explore the strategic processes that accompany such transformation, such as rising productivity of rice farming, production of high-value crops, and rising incidence of nonfarm work within the local economy and migration to local towns, big cities, and overseas, among the younger generation. An important finding is that in the course of transformation, participation in the nonfarm labor market and migration are the main pathways in moving out of poverty for the children of poor landless farmers.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
How can we achieve a rice Green Revolution in Sub-Saharan Africa? In this chapter, we evaluate the progress of the rice Green Revolution and discuss potential policy interventions to achieve it in Tanzania. For these purposes, we summarize four studies that have been conducted by the authors. Especially, we focus on the effectiveness of irrigation, agricultural training, and microcredit for technology adoption and productivity enhancement of rice cultivation. We found a high potential for the rice Green Revolution in Tanzania and that it can be achievable with proper policy interventions. We propose irrigation development and agricultural training as effective means to achieve the rice Green Revolution in Tanzania.
... The literature on industry policy has called for a shift from why to how (Rodrik 2009;Lin 2010). However, the discussions on industry policy still largely focus on policies at the national level. ...
Governments in Sub-Saharan Africa (SSA) have made concerted efforts to improve farmers’ adoption of modern technologies in their farm operations to realize a rice Green Revolution, improve food security, and alleviate poverty. However, smallholder farmers’ access to farm mechanization in SSA remains constrained due to supply-side and demand-side challenges. On the supply side, the market for agricultural machinery services is often underdeveloped. On the demand side, the smallholders with inadequate knowledge of improved rice cultivation practices have limited demand for mechanized services despite increasing wage rates. This study analyzes the mechanization process of rice farmers in the Mwea Irrigation Scheme, Kenya. The Mwea Irrigation Scheme is the most advanced rice production area in SSA, with farmers familiar with improved rice cultivation practices, well-functioning input credit markets, and millers adopting modern milling technologies, enabling local rice to compete with imported Asian rice. Analyzing original data collected in 2011, 2016, and 2018, we found that most farmers in Mwea implemented rotavation using tractor services provided by farmers’ cooperatives, while they implemented leveling using draft animals. Non-cooperative members reduced tractor use and adopted draft animals to implement both harrowing and leveling, implying the importance of a well-developed mechanization service market.
Active economic policies by developing countries’ governments to promote growth and industrialization have generally been viewed with suspicion by economists, and for good reasons: past experiences show that such policies have too often failed to achieve their stated objectives. But the historical record also indicates that in all successful economies, the state has alwaysplayed an important role in facilitating structural change and helping the private sector sustain it across time. This paper proposes a new approach to help policymakers in developing countries identify those industries that may hold latent comparative advantage. It also recommends ways of removing binding constraints to facilitate private firms’ entry into those industries. The paper introduces an important distinction between two types of government interventions. First are policies that facilitate structural change by overcoming information and coordination and externality issues, which are intrinsic to industrial upgrading and diversification. Such interventions aim to provide information, compensate for externalities, and coordinate improvements in the"hard"and"soft"infrastructure that are needed for the private sector to grow in sync with the dynamic change in the economy’s comparative advantage. Second are those policies aimed at protecting some selected firms and industries that defy the comparative advantage determined by the existing endowment structure—either in new sectors that are too advanced or in old sectors that have lost comparative advantage.
As strategies for achieving sustainable growth in developing countries are re-examined in light of the financial crisis, it is critical to take into account structural change and its corollary, industrial upgrading. Economic literature has devoted a great deal of attention to the analysis of technological innovation, but not enough to these equally important issues. The new structural economics outlined in this paper suggests a framework to complement previous approaches in the search for sustainable growth strategies. It takes the following into consideration: First, an economy's structure of factor endowments evolves from one stage of development to another. Therefore, the optimal industrial structure of a given economy will be different at different stages of development. Each industrial structure requires corresponding infrastructure (both"hard"and"soft") to facilitate its operations and transactions. Second, each stage of economic development is a point along the continuum from a low-income agrarian economy to a high-income industrialized economy, not a dichotomy of two economic development stages ("poor"versus"rich"or"developing"versus"industrialized"). Industrial upgrading and infrastructure improvement targets in developing countries should not necessarily draw from those that exist in high-income countries. Third, at each given stage of development, the market is the basic mechanism for effective resource allocation. However, economic development as a dynamic process requires industrial upgrading and corresponding improvements in"hard"and"soft"infrastructure at each stage. Such upgrading entails large externalities to firms'transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating industrial upgrading and infrastructure improvements.
A new data set on national poverty lines is combined with new price data and almost 700 household surveys to estimate absolute
poverty measures for the developing world. We find that 25% of the population lived in poverty in 2005, as judged by what
“poverty” typically means in the world's poorest countries. This is higher than past estimates. Substantial overall progress
is still indicated—the corresponding poverty rate was 52% in 1981—but progress was very uneven across regions. The trends
over time and regional profile are robust to various changes in methodology, though precise counts are more sensitive.
The Growth Report: Strategies for Sustained Growth and Inclusive Development
Growth Commission (2008) 'The Growth Report: Strategies for Sustained Growth and Inclusive Development'. Washington, DC:
Growth Commission.