Labor Market Policies as Instruments of Industry Policy: What Can Europe Learn from Southeast Asia? |
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| Authors: | Anis Chowdhury |
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| Institution: | 1. University of Western Sydney (Australia);2. The author is Professor of Economics, University of Western Sydney (Australia), and is the founder and co‐editor of Journal of the Asia Pacific Economy;3. e‐mail: . This article originally was given as the Keynote Address at the Conference of European Network on Industrial Policy (EUNIP), University of Limerick, Ireland, June 20–22, 2006. |
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| Abstract: | Abstract . It seems there is a pessimistic view about the need and effectiveness of industry policy in an era of unprecedented globalization. The discussion about industry policy has been mostly on the fiscal, credit, and tariff measures, which are generally designed to favor particular activities. However, the rationale for industrial policy does not have to be the infant industry argument or market failures and knowledge spillover. In advanced industrial countries, the rationale for industry policy arises from the need to constantly restructure their economies to maintain competitiveness. The lesson that mature democracies can learn from East and Southeast Asia is the importance of consensual policy making, especially in the realm of the labor market. Such policies have not only helped them maintain macroeconomic stability but also accelerated industrial restructuring. |
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