Post-crisis approaches to state intervention: New developmentalism or industrial policy as usual?

Abstract

The 2008 global crisis seems to have departed radically from the prevailing neoliberal ideology and practice concerning states’ minimal involvement in the economy. This article is an essay on and a literature review of the post-crisis features of ‘industrial policy’-type state interventions. In particular, whether crisis-era interventions have given way to neoliberal governments’ more explicit stance on industrial policy in the aftermath of the crisis, is investigated. The changes that had taken place in the global context of state interventions by the time of the outbreak of the crisis are surveyed, and it is argued that crisis did not provoke any ‘return to the state’. Rather, ongoing approaches to industrial policy were reinforced, or the crisis has simply brought states’ prevailing practices to the fore. The observed modest convergence between neoliberal and developmental states’ industrial policy practices has been bi-directional, driven by neoliberal states’ inclination to devising formal strategies and conversely, by emerging economies’ becoming more familiar with intervention practices allowed by international organizations. Common global challenges, and increased global interconnectedness have also been powerful drivers of convergence.