Competitiveness and Industrial Policy: From Rationalities of Failure Towards the Ability to Evolve

WIFO, Working Paper No. 505/2016

40 Pages Posted: 14 Jan 2016

See all articles by Michael R. Peneder

Michael R. Peneder

Austrian Institute of Economic Research (WIFO)

Date Written: January 12, 2016

Abstract

This article elaborates a dynamic rationale of industrial policy, focusing on how to strengthen the socio-economic system’s ability to evolve, i.e. how to achieve high real income together with qualitative change. It highlights that the ubiquitous rationalities of failure, be it of markets, governments, or systems, are rooted in a peculiar habit of accepting hypothetical perfect states as normative benchmarks. In contrast, a dynamic logic of intervention should start from the question, what the system aims to accomplish. Combining the structuralist ontology of micro, meso and macro with the functional principles of evolutionary change, the paper proposes a general typology of economic policies based on their respective contributions to the system’s ability to evolve.

Keywords: Industrial policy, competitiveness, evolutionary economics, structural change

JEL Classification: O25, L52, L53

Suggested Citation

Peneder, Michael R., Competitiveness and Industrial Policy: From Rationalities of Failure Towards the Ability to Evolve (January 12, 2016). WIFO, Working Paper No. 505/2016, Available at SSRN: https://ssrn.com/abstract=2714941 or http://dx.doi.org/10.2139/ssrn.2714941

Michael R. Peneder (Contact Author)

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
232
Abstract Views
888
Rank
239,285
PlumX Metrics