From 1960 to 1989, South Korea experienced a famous economic boom, with real GDP per capita growing by an annual average of 6.82 percent. Many observers have attributed this to industrial policy, the practice of giving government support to specific industrial sectors. In this case, industrial policy is often thought to have powered a generation of growth.Did it, though? An innovative study by four scholars, including two MIT economists, suggests that overall GDP growth attributable to industrial policy is relatively limited. Using global trade data to evaluate changes in industrial…
