Jobs or Privileges: Unleashing the Employment Potential of the Middle East and North Africa by Marc Schiffbauer Abdoulaye Sy Sahar Hussain Hania Sahnoun Philip Keefer

Author:Marc Schiffbauer, Abdoulaye Sy, Sahar Hussain, Hania Sahnoun, Philip Keefer
Language: eng
Format: epub
Publisher: The World Bank

Note:

a. See also Murphy, Vishny, and Schleifer (1989).

b. Where political risk is high—and in many East Asian countries it was very high—governments cannot easily attract private investment. To increase investment, they can either rely on state-owned enterprises—for which political risk is irrelevant—or offer large subsidies to private entrepreneurs to raise their risk-adjusted rates of return. As the subsequent discussion makes clear, during a period in which private investors confronted substantial political risk, the Republic of Korea embraced both strategies.

c. When the problem is the identification of new markets, however, neither side of the dialogue is likely to be especially well-informed; it is precisely because they do not know about potential opportunities that the need for industrial policy might exist. Lin and Monga (2010) point out that a few private entrepreneurs might have already entered new profitable industries. They conclude that these local success stories are themselves informative. Public-private dialogues could bring such examples to light.

d. The essentially selective characteristic of industrial policy prompts critics to describe it as “picking winners.” However, market failures are typically related to particular sectors or types of economic activity. Hence, industrial policies intended to correct them are necessarily selective.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.