Nathan Lane will present "The Who, What, When, and How of Industrial Policy: A Text-Based Approach" (co-authored with Réka Juhás, Emily Oehlsen, Verónica C. Pérez).

Since the 18th century, policymakers have debated the merits of industrial policy (IP). Yet, economists lack basic facts about its use. Their study sheds light on industrial policy by measuring and studying global policy practice for the first time. The authors first create an automated classification algorithm for categorizing industrial policy practice from text. They then apply it to a global database of commercial policy descriptions and quantify policy use at the country, industry, and year levels (2009-2020). These data allow them to study fundamental policy patterns across the world. They highlight four findings. First, IP is common (25% of policies in our database) and has expanded since 2010. Second, instead of blunt tariffs, IP is granular and technocratic. Countries tend to use subsidies and export promotion measures, often targeted at individual firms. Third, the countries engaged most in IP tend to be wealthier (top income quintile) liberal democracies. In our data, IP is rarer among the poorest nations (bottom quintile). Fourth, IP is targeted toward a subset of industries and is highly correlated with an industry’s revealed comparative advantage. The authors show that industrial policy is a prominent feature of the global economy and a far cry from industrial policies of the past.

Link to the paper : here

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