Industrial policy can promote economic diversification from "summary" of The Industrial Policy Revolution II by J. Esteban,J. Stiglitz,Justin Lin Yifu
The promotion of economic diversification is a central objective of industrial policy. By actively shaping the structure of the economy, industrial policy can help countries move away from over-reliance on a narrow range of industries towards a more balanced and resilient economic base. This is particularly important for developing countries, which often face the challenge of being too dependent on a few primary commodities or industries. Through targeted interventions such as subsidies, tax incentives, and investment in infrastructure and human capital, industrial policy can encourage the development of new industries and the expansion of existing ones. By providing support to strategic sectors that have the potential to drive economic growth and create jobs, industrial policy can help countries diversify their economic base and reduce their vulnerability to external shocks. At th...
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