New measures reveal a growing industrial policy divide
New measures reveal that advanced economies are leading a global surge in industrial policy—developing countries must navigate the consequences. By Reka Juhasz, Nathan Lane, Emily Oehslen, and Veronica Perez on VoxDev.
New measures reveal a growing industrial policy divide
Article by Reka Juhasz, Nathan Lane, Emily Oehslen, and Veronica Perez on VoxDev
Long the preserve of developing economies, industrial policy is staging a comeback in the rich world. From Washington to Brussels, governments are increasingly intervening in markets with the goal of making certain domestic activities more attractive. As economists reconsider industrial policy (Juhász et al. 2023), one thing is missing: data. For all the attention industrial policy now receives, we know surprisingly little about what governments are actually doing. Is it true advanced economies dominate industrial policy today—or are we simply paying more attention when they do it?
In recent work (Juhász, Lane, Oehlsen and Pérez 2025), we aim to measure industrial policy more systematically to identify patterns in its implementation and support evidence-based evaluation. Our approach analyses the text of policy announcements using a large language model (LLM) to determine whether a policy qualifies as industrial policy. This differs from traditional approaches that classify policies based on the tools they use. This allows us to include, for example, a Brazilian import tariff on IT and telecommunications equipment aimed at supporting the domestic industry, while excluding a similar tariff in Pakistan that is primarily intended to raise government revenue (Table 1 contains further examples).