Essays on Passive vs Anticipatory Industrial Policies Coursework

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The paper "Passive vs Anticipatory Industrial Policies" is a great example of business coursework.   Industry policies can be defined as the policies that a nation uses in order to guide the total strategic effort of the country. The policies are aimed at guiding the development of different sectors of the economy hence creating a stronger portfolio of national industry. Most countries prefer to use industrial policies as a way of promoting the growth of their manufacturing industries. The governments will mostly come up with some strategies that improve the competitiveness of domestic firms and consequently encouraging structural transformation (Wade, 2003).

Most industrial policies assume an intervention style as opposed to laissez-faire economies. The common elements in many industrial policies are trade and fiscal policies. For example, a country may decide to impose barriers to some key sectors of its manufacturing companies by imposing heavy taxes on imports and denying importers licenses of trade. Such actions have been used as industrial policies. However, there has been a sharp divide on whether passive industrial policies are more effective compared to anticipatory industrial policies. Passive vs Anticipatory Industrial Policies The recent global economic meltdown in 2008 has left many countries strategizing on whether to use passive or anticipatory industrial policies in order to avoid cases of economic crunches (Blundell-Wignal et al. , 2009).

The European Union has also been in the forefront championing for its member’ s states to shield themselves from any looming cases of the financial crisis. After the global recession in 2008, many countries were faced with difficulties as industrial competitions become stronger limiting access to resources that dictated effective management. After the recession, most of the countries have also learned that the environment does not limit growth since greener development solutions are becoming more plausible. According to Stephen Bell, some comparative research in industry policies has shown that industrial policies have been employed even with non-interventionist’ s countries like the US (Bell, 2012).

For example, the US has been able to employ some wide-ranging industrial policies. The author also feels that countries that are engaging in industry policies must diversify their policy goals. According to Atkinson and Coleman’ s model of anticipatory industry policies, countries such as the US must categorize and analyze their national styles of policy regulations.

The two authors propose three dimensions with anticipatory policies that have been used with different countries to try and avoid economic crisis. The first category is the policy objectives. After the 2008 economic recessions, many countries decided to protect their industries from competition mostly resulting from foreign countries. On the other hand, countries have also contemplated combining anticipatory and passive industrial policies as a way of averting an economic crisis. However, it is considered that anticipatory industrial policies are not the best since they only react after the economic crisis has occurred.

For this reason, many economists prefer to use passive industrial policies that act as a shield to the potential looming economic crisis. Atkinson and Coleman also propose the degree of state intrusiveness when it comes to anticipatory policy regulations. The authors also point out that anticipatory approaches aim at structural intervention while passive industrial policies aim at environmental intervention. With anticipatory industrial policies, the rationale is based on attaining national economic goals hence; preparations for intervention are targeted and selective in consideration to industries that are strategically important for industrial change (Tybout, 2000).

References

Altenburg, T. (2011). Industrial Policy in Developing Countries: Overview and lessons from seven country cases. German Development Institute, 27 (5): 483–502.

Bell, S. (2012). Australian Manufacturing and the State. New York: Cambridge University Press.

Blundell-Wignal et al. (2009). Dealing with financial crisis and thinking about the exit strategy. OECD Financial Market Trends , Vol 2009/1. .

Bruce Kennedy. (2014, July 18). Flaring Ukraine crisis could affect global economy. Retrieved 2014, from CBS News: http://www.cbsnews.com/news/flaring-ukraine-crisis-could-affect-global-economy/

Cimoli, M., Dosi, G., & Stiglitz, J. E. (2009). Industrial Policy and Development: The Political Economy of Capabilities Accumulation. Oxford: Oxford University Press.

Pan Pylas. (2014, September 3). Measuring impact of Ukraine crisis on European economy. Retrieved 2014, from CTV News: http://www.ctvnews.ca/business/measuring-impact-of-ukraine-crisis-on-european-economy-1.1989071

Peek, J. a. (2000). Collateral Damage: Effects of the Japanese Bank Crisis on Real Activity in the United States. American Economic Review , 90, 30-45.

Tom Pfeiffer. (2014, August 21). FACTBOX -The effect of Russia sanctions on European companies. Retrieved 2014, from Reuters: http://uk.reuters.com/article/2014/08/21/ukraine-crisis-companies-idUKL6N0QE4MZ20140821

Tybout, J. R. (2000). Manufacturing firms in developing countries. How well do they do, and why? Journal of Economic Literature , 38,11-44.

Wade, R. (2003). Wade, Robert (2003). Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton, NJ: Princeton University Press.

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