Industrial policy has a bad name. It is commonly identified with policies directed to prevent competition and to pick winners (or save losers) in a discretionary fashion. The recent economic and financial crises have shown that governments lack of policy instruments to enhance growth and help...

It is conventional wisdom that industrial policies can be at odds with competitive markets. This note examines the historical basis for industrial policy and empirical effects. Although the direct effects of industrial policy are mixed, the indirect effects often involve market distortions. By...