Planet Money Summer School 5: The many ways governments influence industry
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Aug 6, 2025 
Juan Ricard-Uguet, a political science professor at Loyola University, Maryland, dives into the complex relationship between government and industry. He discusses how governments shape economies through industrial policies, examining the effectiveness of interventions like tax breaks. The conversation spans global examples, from Argentina's failed phone manufacturing hub to China's solar dominance, highlighting key factors for success and the pitfalls of mismanaged policies. It’s a thought-provoking look at when and why governments should step in to guide industries.
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What Is Industrial Policy?
- Industrial policy is when governments actively influence industries to foster economic development.
- It can involve basic infrastructure or more direct interventions like tax breaks and production mandates.
Argentina's BlackBerry Manufacturing Attempt
- Argentina forced companies like BlackBerry to manufacture phones locally in a remote, harsh region.
- Despite huge investment and initial excitement, the product was outdated and expensive, leading to failure.
Limits of Import Substitution
- Import substitution means producing domestically what was previously imported.
- Its success depends on choosing industries aligned with a country’s comparative advantage for global competition.
