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A plea to return to the origins of development thinking Industrial Policy in Developing Countries. Failing Markets, Weak States by Tillman Altenburg and Wilfried Lütkenhorst Reviewed by MICHELE CLARA, Senior Coordinator, Research and Industrial Policy Advice Unit, United Nations Industrial Development Organization As a topic long marginalized in the development debate and fiercely opposed by some of the leading organizations in the field, industrial policy has received surprisingly extensive attention over the last few years. As the Nobel-prize winner and former Chief Economist at the World Bank, Joe Stiglitz, phrased it: “There has been a time when ‘industrial policies’, for both developed and developing countries, were bad words not to be spoken either in public or in private by respectable people.” Now these ‘bad words’ are used a lot more frequently and they seem to have made it all the way to the front cover of books issued by respectable publishers, without even the need for a ‘parental guidance’ sticker! Indeed, today, the body of literature is large enough that a reader may legitimately ask if anything new can still be said on the topic. Tillman Altenburg and Wilfried

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Lütkenhorst have recently joined the club of authors trying to add their insights and views in this debate and, boy, do they have a lot to say. The combination of a well-known academic, based at the German Development Institute, and a long-time international civil servant at the United Nations Industrial Development Organization is surely one of the reasons why the book should be read by a very broad audience of people engaged in development. Only too often these two communities seem to be living on different planets, the former engaged in academic debates, the latter drafting outcome statements at global events, and neither of the two necessarily inspiring or realistic.

“In the weeks immediately following the endorsement of the Agenda 2030 at the UN General Assembly, the book is an uncomfortable but recommended read.”

In the weeks immediately following the endorsement of the Agenda 2030 at the UN General Assembly, the book is an uncomfortable but recommended read. In the first three chapters, the authors make it clear that the structural transformation of an economy is far from simple, especially in low-income countries. And if you think these challenges are formidable, just wait until you read about ‘sustainability’ and ‘inclusiveness’, two catchwords abundantly used these days but rarely explained as vividly and with as much depth as they are in this book. The two authors do not shy away from taking positions, with sore punchlines for readers across the entire ideological spectrum. Chapter 6 on why industrial development is such a challenge in lowincome countries is likely to raise an equal amount of eyebrows in the orthodox camp (the section on safeguards takes aim at almost all the pillars of the Washington Consensus) as in the structuralist one (the section on policy capabilities provides vivid examples of why industrial policies should be marked with a ‘handle with care’ stamp). Importantly, none of the above are based either on theorizing or on academic debate. The insights presented in this book are all solidly drawn from practice and research. In the end, the book delivers pretty much what the reader would have anticipated from the front cover: an outlook into the opportunities and the risks which practitioners in development economics, and even more so the select few working towards structural transformation in lowincome countries, will be confronting in their daily work. The authors choose not to be prescriptive in their conclusions: in the final chapter the reader will find neither the proverbial

Shared prosperity. Issue 20  

Steady prosperity has not been achieved throughout the world and there remain remarkable differences between and within regions, countries a...

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