The IMF and the World Bank may be about to acknowledge the role of industrial policy and government investment among others in accelerated development as two of their own staff have proven it, writes *Jomo Kwame Sundaram
For decades, the two Bretton Woods institutions have rejected the contribution of industrial policy (IP), or government investment and technology promotion efforts, in accelerating and sustaining growth, industrialization and structural transformation.
Finally, two International Monetary Fund (IMF) staff members, Reda Cherif and Fuad Hasanov, have broken the taboo. They embrace industrial policy, arguing against the current conventional wisdom that East Asian industrial policies cannot be successfully emulated by other developing countries.Women at work in a clothes factory Miracle economies not miraculous.
They argue that IP has been key to East Asian ‘miracles’, offering valuable lessons for sustaining ‘catch-up’ growth. For them, appropriate IP interventions have been key to successful entry into more sophisticated industrial activities, early strong export orientation, and fierce competition with strict accountability