Juhász, RékaLane, Nathan J.Rodrik, Dani2023-08-302023-8Juhász, Réka, Nathan J. Lane, and Dani Rodrik. "The New Economics of Industrial Policy." HKS Faculty Research Working Paper Series RWP23-022, August 2023.https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37376936We discuss the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational problems. On the whole, the recent crop of papers offers a more positive take on industrial policy. We review the standard rationales and critiques of industrial policy and provide a broad overview of new empirical approaches to measurement. We discuss how the recent literature, paying close attention to measurement, causal inference, and economic structure, is offering a nuanced and contextual understanding of the effects of industrial policy. We re-evaluate the East Asian experience with industrial policy in light of recent results. Finally, we conclude by reviewing how industrial policy is being reshaped by a new understanding of governance, a richer set of policy instruments beyond subsidies, and the reality of deindustrialization.en-USResearch Paper or Report2023-08-3010.3386/w31538