Industrial Policy after the Crisis

Industrial Policy after the Crisis

Seizing the Future

Patrizio Bianchi and Sandrine Labory

Industrial Policy after the Crisis provides a fresh and insightful study on the lessons that can be drawn from the global financial crisis for the analysis, definition and implementation of industrial policy. The authors utilize a political economy framework for the analysis of industrial development post-crisis, centred on the organisation of production and stressing its importance for the wealth of nations, meaning not only rising income but also ‘justice and happiness’.

Chapter 6: The European Experience

Patrizio Bianchi and Sandrine Labory

Subjects: economics and finance, industrial economics

Extract

In 2000, the EU launched a complex strategy for industrial development aiming to revitalize the European economy by completing the three phase process establishing monetary union and enlargement to Central and Eastern European countries. The context external to the EU was also important since the Doha trade agreement was signed in the same year and China entered the World Trade Organization (WTO). The Lisbon Strategy proposed concerted action involving multiple policies and represented a long-term vision of industrial development for the EU. This chapter explores how this new approach relates to previous European approaches to industrial policy. First, a historical review of industrial policy is provided, based on our previous work (Bianchi and Labory, 2009). The Lisbon Strategy is then analysed as a longterm vision of industrial development. The problem with this strategy has been the lack of political commitment to its implementation, as we will see in this chapter. ECONOMIC OPENING AND STRUCTURAL ADJUSTMENT POLICIES Economic union means an aggregation of nation states agreeing a series of common rules in order to guide an economic integration process. Economic union is therefore primarily a political action that facilitates an institutional transformation and, with it, structural dynamics within and between countries. In order to define the nature and direction of the structural changes brought about by the opening of the economy it is therefore necessary to simultaneously define the collective dynamics and institutional changes: that is the collective norms that regulate the internal and external relationships of the social groups that...

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