Industrial Policy Will Fail Because of Political Incentives

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The Plus de Champs Plusé-Le-Mem shows here we are in the modern era. People have admired China because it does not, many of its policies. Our scene is admirable and impossible in the United States due to our political system. We need to understand that government can do experiments. And then we should be willing to hit myths, bureaucracies, once they're established, they're hard to get rid of.

Economist and political scientist Michael Munger of Duke University talks about industrial policy with EconTalk host Russ Roberts. Munger argues that in a democracy, the default outcome for industrial policy is crony capitalism--attempts to improve on that outcome either by appointing experts or eliminating cronyism are going to fail for political reasons. The conversation concludes with a discussion of the reliability of Munger's claim and what options are left for dissatisfied reformers.