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Competitiveness and industrial policy: from rationalities of failure towards the ability to evolve

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  • Michael Peneder

Abstract

This article elaborates a dynamic rationale of industrial policy, focusing on how to strengthen the socio-economic system’s ability to evolve, i.e. how to achieve high real income together with qualitative change. It highlights that the ubiquitous rationalities of failure, be it of markets, governments or systems, are rooted in a peculiar habit of accepting hypothetical perfect states as normative benchmarks. In contrast, a dynamic logic of intervention should start from the question, what the system aims to accomplish. Combining the structuralist ontology of micro-, meso- and macro with the functional principles of evolutionary change, the paper proposes a general typology of economic policies based on their respective contributions to the system’s ability to evolve.

Suggested Citation

  • Michael Peneder, 2017. "Competitiveness and industrial policy: from rationalities of failure towards the ability to evolve," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 829-858.
    • Handle: RePEc:oup:cambje:v:41:y:2017:i:3:p:829-858.
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    More about this item

    Keywords

    Industrial policy; Competitiveness; Evolutionary economics; Structural change;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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