Industrial Policy and Development in Developing Countries (The Proponents and the Opponents

Abstract

This paper aims to discuss and analyse the role and importance of implementing industrial Policy to promote industry and enhance economic development in developing countries. The paper discusses the economic justifications for using industrial policy as well as the criticisms leveled against it, for this purpose it analyses the ideas of two different approaches to industrial policy. The first held by the neo-liberals in the USA , who oppose the use of industrial policy and emphasise the role of the market in attaining economic development. The second, represented by many economists who support the use of industrial policy to promote industry and accelerate economic development, they justify their stand by pointing to the negative impact on developing countries of Globalisation and the rules of World Trade Organisation.

The paper concludes, in the light of the analyses, that there seems to be a need for using a carefully designed industrial policy in developing countries to achieve economic development, as well as modifying the rules of WTO to cater for the spacial needs of those countries.