Governments have long used industrial policy tools to help harness private international investment for broader domestic development aims. Starting in the mid-1990s, international trade and investment treaties began to limit such state involvement in the market. And over the ensuing decades, such rules increased in terms of their stringency and commonality. However, particularly in a world shocked by COVID-19 and confronting the challenge of climate change, governments and stakeholders are reopening the debate on industrial policy.
We look at the opportunities and challenges that industrial policy presents for achieving sustainable development, and the advantages and disadvantages of international rules restricting the use of such policies.