The Economics Show Update from Davos: Can industrial policy really work? With Beata Javorcik
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Jan 24, 2025 
Beata Javorcik, Chief Economist at the European Bank for Reconstruction and Development and a professor at Oxford, shares her expert insights on industrial policy's evolution and challenges. She discusses the historical context behind industrial strategies and how they’re gaining traction amid rising economic nationalism. Javorcik explores the delicate balance between supporting green technologies and protecting traditional industries. She also reflects on lessons from East Asian economies and the importance of adaptive policies for fostering innovation.
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Industrial Policy Defined
- Industrial policy is government intervention aimed at changing an economy's productive structure.
- It was heavily used by communist countries and credited with the Asian tigers' growth but later discredited.
EBRD's Early Role
- The EBRD initially focused on dismantling central planning and communist industrial policies after the fall of the Iron Curtain.
- This involved promoting private enterprise and helping countries privatize state-owned enterprises.
Shifting Perspectives on State Intervention
- The 1990s focused on free markets, but the 2008 financial crisis shifted perspectives.
- The economics profession recognized that markets don't always deliver efficient outcomes, warranting state intervention.