Political economy considerations are crucial from "summary" of The Industrial Policy Revolution II by J. Esteban,J. Stiglitz,Justin Lin Yifu
When designing industrial policies, it is essential to take into account political economy considerations. These considerations are crucial because they help us understand the complex interplay of political forces and economic interests that shape policy outcomes. In other words, political economy considerations highlight the importance of analyzing how different actors, such as governments, businesses, and citizens, interact with each other to influence policy decisions. One key aspect of political economy considerations is the need to assess the distributional implications of industrial policies. By distributional implications, we refer to how these policies affect different groups within society, such as workers, consumers, and businesses. For example, a policy that supports a particular industry may benefit the companies operating in that industry but could potentially harm consumers through higher prices. Therefore, understanding these distributional implications is crucial for policymakers to make informed decisions that balance the interests of vario...
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