The Need for Industrial Policies: A Review of the Literature

Promoting economic growth has been a topic of economic debate since the late eighteenth century and publication of Adam Smith’s works. Most economic researchers agree that it is market forces that regulate market prices and enable the distribution of resources from less productive to more productive entities. However, it has been shown that government intervention is required to achieve overall economic transformation. Both historically and currently, the instrument typically used by governments to promote industrial and economic development is industrial policy.