Page 1 of 37

Compe&&on Policy

vs.

Industrial Policy

as a Growth Strategy

Tatsuo Ha)a

Asian Growth Research Ins5tute

1

APEA Annual Conference

July 2015

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1. Industrial policy promotes targeted industries through

• trade protec5on,

• net transfers,

• tax breaks, and

• government loans

2. Compe&&on policy in today’s talk refers to any policy

that promotes compe55on in the market. Examples:

• an5-cartel policy,

• trade liberaliza5on,

• deregula5on, and

• priva5za5on of publicly owned monopolies

2

Two Growth Strategies

Page 3 of 37

1. Innova&on

2. Shi?ing resources

from low to high produc&vity sectors

For example, migra&on of workers from the

agricultural to the manufacturing sectors

improved na&on’s produc&vity during the

rapid growth period.

3

Two Sources of Economic Growth