Institutions for Industrial Policy: The Foundation of Economic Development
IMF Working Papers, March 27, 2026
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- Institutions for Industrial Policy: The Foundation of Economic Development
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Bibliographic details
- Authors: Reda Cherif, Fuad Hasanov, Gary Xie
- Published: March 27, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229040549.001
Institutional architecture proposed
- Proposes an institutional architecture for the successful implementation of industrial policy inspired by the Asian Miracles—Japan, Korea, Taiwan Province of China, Singapore, and Hong Kong SAR.
- Central institutional arrangement: a leading agency that accumulates sector-specific knowledge through continuous experimentation and feedback from markets to:
- design the sector- and context-appropriate package of policies (which is a priori unknown), and
- coordinate the implementation of those policies.
4A model for the leading agency
- Postulates a 4A model of institutional features for the leading agency:
- Ambition-Agency
- Autonomy
- Accountability
- Adaptability
Analytical parallels and implications
- Draws strong parallels with the rise of independent central banks.
- Infers concrete steps to achieve the 4A characteristics by analogy with the institutional evolution of central banking.
Key findings and framing
- Successful industrial policy requires an institutional lead that continuously learns from market feedback and experiments to identify sector- and context-specific policy packages.
- The required policy package is characterized as a priori unknown, underscoring the need for iterative learning and adaptation.
- The Asian Miracle economies serve as the empirical inspiration for institutional design.
Subjects and keywords emphasized
- Subjects: Automobile industry, Economic sectors, Export performance, Exports, International trade, Technology.
- Keywords included: Asian Tigers., Automobile industry, central bank, East Asia, Economic Growth, economic policy, executive branch, Export performance, Exports, Federal Reserve, Global, Industrial Policy, Institutions for Development, leading agency, Planning Agencies, prime minister, public goods, Technology and Innovation Policy.
Institutions for Industrial Policy: The Foundation of Economic Development — IMF Working Paper by Reda Cherif, Fuad Hasanov, and Gary Xie (March 27, 2026).
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- Working Paper