Some thoughts re: the profession’s so-called focus on RCTs and poverty versus industrial policy and growth, from someone who has hyper-fixated on this fact for some time.
First it would help to read this review by Juhasz, Rodrik, & Lane, published in the Annual Review (1/n)
Now to some of my main points
Point 1. Not all of modern development has focused on the former — although not explicitly phrased as macrodev research, a lot of work already touch upon issues crucial to our understanding of industrial policy and the growth of Asia. To wit:
Point 1. Not all of modern development has focused on the former — although not explicitly phrased as macrodev research, a lot of work already touch upon issues crucial to our understanding of industrial policy and the growth of Asia. To wit:
I. The literature on the effectiveness of place-based policies, especially of export processing zones
II. The literature on the dynamic effects of exporting on productivity, i.e., learning-by-exporting — in particular, see this RCT by Atkin et al: (3/n)
II. The literature on the dynamic effects of exporting on productivity, i.e., learning-by-exporting — in particular, see this RCT by Atkin et al: (3/n)
III. The literature on the effectivity of other policies, whether or not explicitly phrased as industrial policy, on exports and firm growth
IV. The wider literature on firms in developing economies, e.g., this classic paper on misallication by Hsieh and Klenow
IV. The wider literature on firms in developing economies, e.g., this classic paper on misallication by Hsieh and Klenow
Point 2. Of course, a lot of what you would consider as literature directly engaging with industrialization and/or IP might be by economists outside micro-development.
The above fact owes to the fact that answering Qs on industrialization/IP requires different tools
I. The most obvious candidate would be macro dev, but there *are* points of discontent: some people do not like cross-country regs or extensions
of two-sector growth models.
I. The most obvious candidate would be macro dev, but there *are* points of discontent: some people do not like cross-country regs or extensions
of two-sector growth models.
II. Another field would be trade and industrial organization. Marc Melitz and co authors, for example, have done theoretical and structural work on the topic.
I have seen more and more work studying industrial policy in a particular industry using techniques from IO.
I have seen more and more work studying industrial policy in a particular industry using techniques from IO.
To add, I would say trade has been the natural home of the study of industrial development for a long time
This is because of the interest in how trade policies (import subst./trade liberalization/export promotion) affect country/firm exports and export composition
This is because of the interest in how trade policies (import subst./trade liberalization/export promotion) affect country/firm exports and export composition
III. Economic geography has also made strides to understand structural transformation across time and space. One of my favorite papers:
Point 3. This might irk some people: but we have to recognize developments in the understanding industrial policy/industrialization in heterodox work and in other disciplines like management
Perhaps because they have been unbridled by technical/institutional requirements, they have paid much more attention to industrialization than the mainstream
The Post-Keynesians and Evolutionary people, in particular, seem active strands studying these topics
The Post-Keynesians and Evolutionary people, in particular, seem active strands studying these topics
Point 4. We are already seeing a bit of a revival when it comes to the explicit study of industrial policy in the mainstream.
See the folks in these papers + Tishara Garg has very new and interesting work on IP!
It’s a very exciting time to be interested in these topics!
See the folks in these papers + Tishara Garg has very new and interesting work on IP!
It’s a very exciting time to be interested in these topics!
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