As the complexities of modern economies grow, traditional approaches to industrial policy face increasing scrutiny. For decades, debates have raged about how governments can intervene to foster innovation, address market failures, and create sustainable development paths. Today, industrial policy has undergone a transformation, and now embraces elements of market liberalism.
In this episode of Innovation Matters, Professor Michael Munger from Duke University explores these issues, suggesting that industrial policy often oscillates between two extremes: setting the foundational rules of the game for markets to thrive and directly managing industry outcomes through subsidies, regulations, or nationalization. He highlights the inherent tensions in these approaches, including the risks of rent-seeking, misaligned incentives, and the difficulty of predicting which innovations will succeed.
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As the complexities of modern economies grow, traditional approaches to industrial policy face increasing scrutiny. For decades, debates have raged about how governments can intervene to foster innovation, address market failures, and create sustainable development paths. Today, industrial policy has undergone a transformation, and now embraces elements of market liberalism.
In this episode of Innovation Matters, Professor Michael Munger from Duke University explores these issues, suggesting that industrial policy often oscillates between two extremes: setting the foundational rules of the game for markets to thrive and directly managing industry outcomes through subsidies, regulations, or nationalization. He highlights the inherent tensions in these approaches, including the risks of rent-seeking, misaligned incentives, and the difficulty of predicting which innovations will succeed.
Innovation has created huge wealth and opportunities over the past two centuries, and since the mid-20th century in particular. But over the past decades, many point to stagnating productivity. That makes it all the more important to aim for a fundamental reconceptualization and rebirth of innovation for the future.
In this episode, Prof. Alex Tabarrok argues that by embracing a culture of growth and significantly reforming education, intellectual property laws, and bureaucratic regulations, societies can reignite the kind of innovation that drives substantial economic advances and improves the standard of living worldwide.
Prof. Alex Tabarrok holds the Bartley J. Madden Chair in Economics at the Mercatus Center and is a professor of economics at George Mason University.
UNECE
As the complexities of modern economies grow, traditional approaches to industrial policy face increasing scrutiny. For decades, debates have raged about how governments can intervene to foster innovation, address market failures, and create sustainable development paths. Today, industrial policy has undergone a transformation, and now embraces elements of market liberalism.
In this episode of Innovation Matters, Professor Michael Munger from Duke University explores these issues, suggesting that industrial policy often oscillates between two extremes: setting the foundational rules of the game for markets to thrive and directly managing industry outcomes through subsidies, regulations, or nationalization. He highlights the inherent tensions in these approaches, including the risks of rent-seeking, misaligned incentives, and the difficulty of predicting which innovations will succeed.
