Published on Jobs and Development

Getting the Incentives Right for Industrial Policies – Part 2

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Mushtaq Khan is a Professor of Economics at University of London.

As developing countries increasingly experiment with "industrial policies," a big question is how to get the incentives right for these policies to work. The JKP recently spoke with an expert on the topic – Mushtaq Khan, Professor of Economics at the School of Oriental and African Studies, University of London.

Heavy traffic jam at Chandni Chowk in Old Delhi. Photo: © shigemitsu

In Part 2 of this series, he explores two successful examples in the 1980s – launching a garment industry in Bangladesh and producing Indian automobiles. Going forward, however, he cautions that many developing countries will have to make industrial policies work in a setting where the political environments, governance capabilities, and private sector capabilities are much weaker. This will mean starting with small-scale experiments, rather than ambitious endeavors, to avoid doing long-term damage.

This post was first published on the Jobs Knowledge Platform.


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