What's New in the New Industrial Policy in Latin America?
Latin America was an aggressive practitioner of industrial policies (IP) in the years 1950-1980. During much of the period the general practice was in line with the then mainstream thinking in development economics. Significant growth, industrializ...
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/16709453/whats-new-new-industrial-policy-latin-america http://hdl.handle.net/10986/12029 |
| Summary: | Latin America was an aggressive
practitioner of industrial policies (IP) in the years
1950-1980. During much of the period the general practice
was in line with the then mainstream thinking in development
economics. Significant growth, industrialization and
modernization took place, but serious flaws in concept and
execution of the IP caused them to fail as a vehicle for
economic catch-up with rich countries in an era of an
expansive world economy. A very serious Latin American
external debt crisis in the 1980s, coupled with the
ascendance in international discourse of arguments for
retrenchment of the State in economics and life, contributed
to a pendulum swing in the region to the policies of the
so-called Washington Consensus. Major structural adjustments
and reforms designed to bring the free market forward and
push back the market governance of the State dominated the
1980s and 1990s. In recent years, however, countries in
Latin America have witnessed a renaissance in the deployment
of systematic IP. This paper explains why IP have emerged
and why they are a necessary step for the more profound
structural change needed to drive sustained high rates of
growth. Based on illustrated cases which we think reflect
the current state of affairs in the region, the paper
highlights the nature of the shift to a more proactive state
promotion of industrial and services upgrading, as well as
the important new characteristics of the current outbreak of
IP which are different from the ones of the past and offer
hope for greater success. It also identifies a legacy of
some bad habits which linger and need to be addressed with
urgency if the new trend is to be successfully consolidated. |
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