Dear Dani, Thanks for your reply to my post.I am a bit frustrated with your statement that industrial policy just has different effects in different countries. If we just say “it works” with good outcomes and “it doesn’t work” with bad outcomes, then there is no way of contradicting this with evidence. ANY policy could pass this test. This kind of “theory” fits past data but cannot predict future outcomes – how do we know what side of the bed industrial policy will wake up on tomorrow?

I know you don’t actually fall for this, but I don’t understand how you actually get around this problem with your “growth strategies” approach. If the effects of every policy are different in every country, what is your evidence base for recommending any particular policy in any country ever?

This jibes with the observation that tons of effort to replicate East Asian Tiger success elsewhere has not actually worked to produce Tiger-like success anywhere else.

Your work has done a lot to convince us all about our inability as “growth experts” to make general recommendations on how to raise growth. But then you seem to recommend more intensive use of “growth experts.” I would go in the other direction and find approaches to development that don’t require these clueless “growth experts,” like systems with a lot of local feedback and accountability – lots of political and economic competition with freedom of choice of consumers, investors, and voters.

Best regards,

Bill

From Aid to Equality

Dani Rodrik’s moody industrial policies – the final questions