Abstract
This article examines state industrial promotion from legal and institutional perspectives. Economists have argued since the 18th century on the economic efficiency of government involvement in the economy. While state-led development policies in some of the most successful development cases, such as South Korea, Taiwan, Hong Kong, Singapore, and more recently, China, have been effective, many have doubted the wisdom of government involvement in the economy. Where the availability of information is limited and the financial market is imperfect (which are the inherent conditions of less-developed countries), the government can provide beneficial initiatives in productive industrial pursuits, as demonstrated by the cited successful development cases. Adoption and management of industrial promotion policies are indeed a hallmark of developmental states. However, industrial promotion by the state, which might be useful in the early stages of economic development, may not be sustained indefinitely. At some point, those industries promoted by the state would have to sustain themselves in the market environment without continuing government support. This article attempts to clarify the conditions for successful state industrial promotion as well as the legal and institutional frameworks that enable the government to provide effective assistance to meet the development needs, by analysing the cases of successful development in East Asia and the United States.
Recommended Citation
Lee, Yong Shik
(2021)
"Law, Institution and State Industrial Promotion,"
Indian Journal of International Economic Law: Vol. 13, Article 4.
Available at:
https://repository.nls.ac.in/ijiel/vol13/iss1/4