On the political economy of the state, the public-private nexus and industrial policy

Abstract

We discuss political economy foundations of industrial policy (IP), with an eye to unearthing its nature, objectives, scope, constraints, limitations and possible new directions. We suggest that extant conceptual economic foundations of IP involve an underconceptualised theory of the state and the public-private nexus. We aim to address this limitation, propose the concept of ‘national economic strategy’, and try to embed IP in its context. In so doing, we also propose that IP could draw on business strategy to expand the arsenal of concepts and measures that can help effect the objectives of the national economic strategy. We claim that this would still leave a number of unresolved issues that we raise and which need to be addressed.