Industrial policy is back in fashion but there are caveats

For at least a generation, industrial policy — public interventions to improve the performance of the business sector — has been largely discredited as a costly failure. However, the debate appears to be shifting, led by China, albeit amid a growing political backlash, especially in the West. It is now more than three decades since several influential institutions, including the World Bank, argued that industrial policy was almost always a costly failure. Now, however, the World Bank has acknowledged that its previous advice has not aged well.