Industrial Policy and the Promotion of Domestic Industry

Industrial policy describes the set of interventions that governments use to affect the economic structure of the economy. Its success or failure therefore has a huge impact on the extent to which a country can achieve inclusive growth. Individual industrial policies can broadly be considered to have either horizontal effects on each industry, or selective effects on certain markets, sectors, firms, technologies or places. For instance, competition policy is itself a common element within most countries’ overarching industrial policy. Depending on the coherence of that policy, a government may or may not find that its competition policy conflicts with the other elements of its industrial policy (for instance, its policies designed to achieve growth in less prosperous regions of the country). There are a number of ways in which governments have sought to promote domestic industry through their industrial policies. This paper looks at the issues that arise and the experiences of competition agencies in Latin American and the Caribbean when encountering these policies. It was prepared as background material for the session "Industrial Policy and the Promotion of Domestic Industry" held at the 2018 Latin American and Caribbean Competition Forum in Argentina on 18-19 September 2018.