Making Growth Happen: Implementing Policies for Competitive Industries - Day 1
Bertrand Badré, Managing Director and Chief Financial Officer, World Bank Group
Creating a Learning Society
Nobel Prize-winning economist Joseph Stiglitz described his ground-breaking research: “Creating a Learning Society.” This work emphasizes the crucial role of learning—the continual acquisition of new capabilities—for economic development; the central role of manufacturing in this process; the policy implications, including a robust defense of industrial policy; and the difficulties of getting learning to take off in practice.
Janamitra Devan, Vice President and Head of Network, Financial and Private Sector Development, World Bank Group
SESSION 1: THE RISKS AND REWARDS OF INDUSTRIAL POLICIES
The speakers discussed the principal issues in implementing policies for rapid industrial growth, setting the context for the remainder of the day. Among other questions, they tackled the following issues:
The discussants contrasted the perspectives of researchers and those making and carrying out policies on day-to-day and year-to-year basis.
- What are the central challenges—the risks and rewards—of implementing industrial policies?
- Are the risks and rewards of industrial policy always determined by the capabilities of the state, or rather by the ability to customize policies to local context?
- More generally, are there different kinds of industrial policy? If so, how do we know which one to use? Do they have different scopes and limits, risks and rewards?
- How can the state “learn to learn,” so that mistakes (in industry selection, in instruments, etc.) are corrected during implementation?
- Are these questions inevitably centered on the state? Can non-state actors conceive and implement industrial policy? What kind of risks and rewards would that have?
- Ultimately, are these problems of economics, or problems of politics? (“Politics” in the general sense—state, bureaucracy, civil society, etc.—and not just “high politics”)
- Ha-Joon Chang, Reader, University of Cambridge
- Shri Arun Maira, Member of the Planning Commission of India
- Mariana Mazzucato, R.M. Phillips Professor of Science and Technology, University of Sussex
Ivan Rossignol, Chief Technical Specialist and Head, Competitive Industries and Innovation Program, Competitive Industries Global Practice, Financial and Private Sector Development, World Bank Group
SESSION 2: THE CHEMISTRY OF GROWTH: EXPERIMENTING WITH POLICY
Policies to boost competitiveness—from innovation policies to policies to leverage natural resource wealth—are complex and difficult to get right through analysis alone. One tool often cited for getting implementation right is experimentation: trying different policies and instruments and scaling up that which works and that which does not.
However, “experimentation” is much easier said than done—very often pilots stay small, or failed programs are kept alive. The factors favoring or blocking successful experimentation are often political and institutional, whether institutional restraints on reallocating resources or political costs to admitting failure. Understanding and solving these issues, and creating more effective “learning by doing” in the state, may yield greater benefits than external policy analysis.
This session discussed the difficulties of making experimentation happen, and ways to overcome such problems, in varied political contexts, including South Asia, East Asia, and Latin America.Speakers:
- José Augusto Coelho Fernandes, Executive Director, Policies and Strategies, National Confederation of Industry, Brazil
- Mushtaq Khan, Professor of Economics, School of Oriental and African Studies, University of London
- Liu Xielin, Professor and Director of Chinese Innovation and Entrepreneurship, Chinese Academy of Sciences
Shahid Yusuf, Chief Economist, The Growth Dialogue; Former Economic Adviser to the Senior Vice President and Chief Economist, Development Economics Department, World Bank Group
SESSION 3A: PUBLIC INSPIRATION FOR PRIVATE INNOVATION
A wave of recent research has revealed new insights into the determinants of innovation and the growth of productive firms, two necessities for sustainable increases in competitiveness, income and jobs. The policy implications of this research—from management support to financial regulation – are still being worked out, but it is already changing how public policies are seen to support (or not) private innovation and private sector growth.
At the same time, public-private councils and dialogues have become increasingly popular in recent years. These are intended to introduce private sector perspectives on policy priorities into public policymaking, and to support the implementation of joint action plans. Their track record in practice is mixed, though in theory they can play a key role in enacting policies that support private sector growth.
The session discussed the intersection of these issues, including the implementation of diverse instruments to support innovative and competitive firms grow and thrive.Speakers:
- Nicholas Bloom, Professor of Economics, Stanford University
- Guillermo Luz, Private Sector Co-Chair, National Council for Competitiveness, Philippines
- John van Reenen, Professor of Economics and Director, Centre for Economic Performance, London School of Economics
Vijaya Ramachandran, Senior Fellow, Center for Global Development
SESSION 3B: REGIONAL APPROACHES TO EXECUTION
Local context is vital to the successful design and implementation of competitiveness policies. Yet “local” can mean different things, from the level of the city or the district, to that of a country, or even a region. There may be patterns of context that shape different problems that have to be solved in order to make policy implementation effective; alternately, there can be few to no commonalities even between neighboring districts.
The speakers brought forth contrasting experiences from different regions on making growth happen.
The session focused in particular on how regional contexts shape different paths to successful implementation.Speakers:
- Laura Alfaro, formerly Minister of Planning and Policy, Costa Rica
- Fadi Ghandour, Founder and Vice-Chairman, ARAMEX, Jordan
- R. J. Lino, Director, Indonesia Port Corporation (Pelindo II), Indonesia
- Rohini Pande, Mohammed Kamal Professor of Public Policy, Harvard Kennedy School
Sujata Lamba, Director, South Asia Region and Competitive Industries Global Practice, Financial and Private Sector Development, World Bank Group
SESSION 4: AFRICAN TAKEOFF: MAKING IT HAPPEN
The sustainability of Africa’s current growth spurt has recently been much discussed. Central to the discussion are several questions:
- Can the spurt be sustained if the commodities boom diminishes, and can it be sustained without the manufacturing sector taking off?
- Why is it so difficult to turn resource wealth into physical investment, especially in large scale infrastructure?
- What role do outside development specialists play, and why do so few of their recommendations end up being implemented in practice?
The session probed all of these questions. As this was the concluding session of the day, it drew together the strands from previous sessions and made them pertinent in the context of Africa.Speakers:
- Patrick J. Achi, Minister of Economic Infrastructures, Côte d’Ivoire
- Alan Gelb, Senior Fellow, Center for Global Development
- Mugo Kibati, Director-General, Kenya, Vision 2030
Gaiv Tata, Director, Africa Region and Financial Inclusion Global Practice, Financial and Private Sector Development, World Bank Group