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2015 | OriginalPaper | Chapter

Revisiting National Economic Planning and Industrial Policy: Concepts, Experiences and the Ecosystem

Author : Murat Yülek

Published in: Economic Planning and Industrial Policy in the Globalizing Economy

Publisher: Springer International Publishing

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Abstract

This introductory chapter provides an overview of economic planning and industrial policy, discussing their origins, first appearance, taxonomies and the motivations behind them with a view to explaining the basis for their role in the current world economy.

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next chapter Modern Economic Development Concepts

The Battle of Kadesh led to the first known recorded international treaty in history between the Hittites and Egypt. The reason for the battle was that both sides wanted to gain control of the Mesopotamian trade routes.

Estrin and Holmes (1990) stress that some of the successful developed economies, including Japan and Sweden, continued to utilize economic plans during the 1980s.

Some economists are careful to distinguish planning and dirigisme, the latter considered to refer to heavy government intervention in the economy without a formal strategy or plan. See Kindleberger (1967, p. 287).

Kindleberger (1967), Wellisz (1960).

Estrin and Holmes (1990), Millikan (1967, pp. 3–4).

Wellizs (1960, p. 252).

Kindleberger (1967).

Wickham (1963).

Balassa (1990), Lopes (2013).

Balassa (1990) remarks that the World Bank’s 1949−1950 Annual Report (p. 18) stated that member countries “know, too, that if they formulate a well-balanced development program based on the [Bank] Mission’s recommendations, the Bank will stand ready to help them carry out the program by financing appropriate projects.”

Katzenstein (1985, p. 61).

Katzenstein (1985 p. 61).

Katzenstein (1985, p. 61), Barbash (1972, p. 7), Lindbeck (1973, pp. 168−169).

Katzenstein (1985, pp. 116–118), Erichsen E (1978).

Balassa (1990, pp. 1–2).

US Government Records of the War Finance Corporation (1918). In fact, it is well known that Hamilton (1791) was a pioneer in the discussion of industrial policy.

See also Galbraith et al. (1976).

As Colm summarized, under the legislation, the President would generate annually, an “Economic Report” including macroeconomic targets (such as employment and production) under the current economic environment, setting forth targets and developing policies (by suggested changes in the existing frame work required to influence economic development in the direction of the goals set forth). Those are indeed indicative planning functions.

That trend has continued. The Five-Year Economic Development Strategy for the District of Columbia, adopted in November 2012, defines itself as “the first document from the District to lay out a clear roadmap for sustained, sector-driven economic development.” The plan “contains the visions, strategies and initiatives that will transform the District by creating 100,000 new jobs and generating $1 billion in new tax revenue to support city services over the next five years.” See Government of the District of Columbia (2013, p. 12).

Chang (1999).

See, for example, Balassa (1990) for neo-liberal criticisms of planning.

Lopes (2013).

Arrow (1958, p. 95), Lange (1949, p. 166, 170), Klosterman (1985, p. 6–9), Moore (1978).

Lange (1949, p. 167), Black (1968, p. 305).

Chenery (1975).

Lange (1949, p. 167).

Black (1968, p. 310).

Malinvaud (1992, pp. 22–23).

Estrin and Holmes (1990, pp. 532–533).

Massè (1962).

As Estrin and Holmes (1990, p. 535) argue, that was probably the case for post war Europe.

Leontief (1976, p. 10) also emphasizes the coordination role of planning. Colm’s (1964, pp. 40–41) account of the USA also could be interpreted as a policy coordination role for the Council of Economic Advisors and the President’s Annual Economic Report.

Dent (2004, p. 81).

Perroux et al. (1949), Kindleberger (1967), Estrin and Holmes (1990), Malinvaud (1992).

Malinvaud (1992, p. 17).

Malinvaud (1992, p. 24).

See McArthur and Scott (1969), Estrin and Holmes (1990).

See Lavoie (1985) or Kirzner (1984), among others, for that discussion.

Wellizs (1960).

Katzenstein (1985, p. 61), Wellizs (1960).

Millikan (1967, p. 6).

Chakravarty (1991).

Wellizs (1960, p. 263), Hampton (1971, p. 338).

Baum and Tolbert (1985) call this “comprehensive” planning.

Estrin and Holmes (1990, p. 537), for example, explain the Dutch and Japanese planning, where the planning body is a relatively powerless think tank with basically no coercive powers vis-a-vis the other governmental departments, contrasted with early French planning where the planning body had significant powers.

In some cases, such as Turkey, shorter term plans were called “programs.” In the Turkish case, plans until recently were drawn for 5 years and programs covered a single year. In other cases, a longer, framework, such as 10 years, was programmed using 3-year plans.

Wellizs (1960, p. 263).

Wickham (1963, p. 335).

“Not at all costs, but by means of reasonable corrective measures” as Massé (1965, p. 266) notes.

Tinbergen (1956) calls policy variables “means” or “instruments” which can be used to “reform” the “foundations,” or to change “qualitative” (structural) or “quantitative” (macroeconomic) aspects of the economy.

Black (1968).

During the Meiji restoration and the High Growth Period (1953–1973), rapid development and “catchup” was a key theme in Japan. The process was accompanied by related slogans such as “fukokukyōhei” (“rich nation-powerful army”) or “shokusan kogyo” (“develop industry and support firms”).

Johnson (1982, p. 18, 19).

Johnson (1982, p. 18).

In addition, Barro (1990) showed that in an endogenous growth model, productive government investment spending can lead to higher growth rates.

As discussed in previous sections, targets versus forecasts were debated during the 1950s in economic planning circles and forecasting has been an especially prominent part of Dutch economic planning.

Quinn et al. (1988, p. 1).

Bryson (2004, p. xii).

Bryson (2004, pp. 11–13).

Stimson et al. (2006, p. 4).

Bachtler and Yuill (2001, p. 6).

Katzenstein (1985, pp. 118–119).

Fremont (1993).

Bachtler and Yuill (2001). This was the case for Western Europe. In the USA, the states and cities under them were already regional actors. Other, especially developing, countries gradually followed suit in trying to devolve powers to regional authorities.

Including the programs of the US Economic Development Administration providing financial support to strategic development plans drawn by communities.

The most typical example could be Japan where the plans were drawn by the Economic Planning Agency and the designers and implementers were the MITI and the genkyokus.

Katzenstein (1985, p. 61).

Wolf (1962, p. 23), Komiya (1975).

Estrin and Holmes (1990, p. 538).

Policies that supported R&D were used earlier in various countries, ranging from the USA and Japan to Scandinavian countries. While R&D support provides output to various industries, they still can be considered a type of industrial policy, as they are primarily directed towards technology-intensive sub-sectors.

See Yülek and Taylor (2012), Eliasson (2010), Yülek (2013).

Rothwell (1984), Edler and Georghiou (2007), Georghiou et al. (2014).

Porter (2000).

Feser (2004), Hefner (2009).

Roeland and Den Hertod (1999, p. 416).

Roelandt and Den Hertod (1999, p. 418).

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Title: Revisiting National Economic Planning and Industrial Policy: Concepts, Experiences and the Ecosystem
Author: Murat Yülek
Publisher: Springer International Publishing
Book: Economic Planning and Industrial Policy in the Globalizing Economy
Print ISBN: 978-3-319-06473-4

Electronic ISBN: 978-3-319-06474-1

Copyright Year: 2015
DOI: https://doi.org/10.1007/978-3-319-06474-1_1

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