Policies and Institutional Engineering in Developing Economies

The existence of profound relationships of some sorts between innovation, industrialization and economic development is now generally acknowledged in both economic history and economic theory. However, the conditions which foster technological learning and its successful incorporation into the economy and in particular the role of institutions and policies continues to be more controversial. This chapter addresses these issues and tries to offer a framework for the interpretation of the ways activities of “institutional engineering” and policies shape technological catching-up and industrial development.