Research and Writing

Industrial Policy and the Great Divergence

Réka Juhász and Claudia Steinwender

We discuss recent work evaluating the role of the government in shaping the economy during the long 19th century, a practice we refer to as industrial policy. We show that states deployed a vast variety of different policies aimed at, primarily, but not exclusively, fostering industrialization. We discuss the thin, but growing literature that evaluates the economic effects of these policies. We highlight some fruitful avenues for future study.

For the Annual Review of Economics

The New Economics of Industrial Policy

Réka Juhász, Nathan Lane, and Dani Rodrik

We discuss the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational problems. On the whole, the recent crop of papers offers a more positive take on industrial policy. We review the standard rationales and critiques of industrial policy and provide a broad overview of new empirical approaches to measurement. We discuss how the recent literature, paying close attention to measurement, causal inference, and economic structure, is offering a nuanced and contextual understanding of the effects of industrial policy. We re-evaluate the East Asian experience with industrial policy in light of recent results. Finally, we conclude by reviewing how industrial policy is being reshaped by a new understanding of governance, a richer set of policy instruments beyond subsidies, and the reality of de-industrialization.

For the Annual Review of Economics

The Who, What, When, and How of Industrial Policy: A Text-Based Approach

Réka Juhász, Nathan Lane, Emily Oehlsen,
and Verónica C. Pérez

This paper provides a new, text-based approach to measuring industrial policy. We take the tools of supervised machine learning to a comprehensive, English-language database of economic policy to construct measures of industrial policy at the country, industry, and year level. We use this data to establish four fundamental facts about global industrial policy from 2009 to 2020.

“Economics Must Catch Up on Industrial Policy” (Juhász and Lane) in The Debate Over Industrial Policy

From the Stigler Center/ProMarket’s volume on industrial policy.

More popular writing

  • “Not a ‘side dish’: New industrial policy and competition” by Lane and Caffarra

    Industrial policy has returned as a major object of interest, with a proliferation of new thinking over the last five years by academics and practitioners (Rodrik et al. 2023). Questions around industrial policy have turned from ‘whether’ (i.e. ‘should governments carry out industrial policy?’) to ‘how’ (‘how should industrial policy be carried out?’).

  • "Economists Reconsider Industrial Policy" by Rodrik, Juhasz, & Lane

    “In the past, economists assessing the performance of industrial policies often focused on indicators such as import tariffs, capturing only limited dimensions of such measures and conflating their objectives with others. A new generation of research efforts takes a more productive approach – and reaches very different conclusions.”

  • “Economics Must Catch Up on Industrial Policy” by Juhász and Lane

  • “A Flight Plan That Fails” by Lane

    “At a time when governments are returning to industrial policy, we are largely clueless about how to make it work.”