We discuss the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational...

Manufacturing generates very little employment in the developing world. Urban jobs are predominantly informal, unproductive, and in services. It seems unlikely that manufacturing will be able to absorb the new increments to the labor force or create more productive jobs for those that are...