Industrial policy is something that has often been criticized throughout the years – how can government effectively help businesses contribute to a growing economy?
In last week’s Toronto Star, Martin Regg Cohn suggested that industrial policy is the best way to kick-start Ontario’s economy. He says that, as economic recovery from the 2008 recession has been less than stellar, it’s time for the government to step in and encourage job creation.
Ontario would not be the first to do so. Other provinces, like Quebec, have started using policy to help stimulate regional development and encourage more output from industrial sectors. And this kind of activity isn’t limited only to Canada – other nations, like Japan, have been dabbling with industrial policy as well.
But the problem, as John M. Curtis and Dan Ciuriak point out in their Institute for Research on Public Policy report, is that industrial policy cannot, by its very nature, be neutral. They also caution that there is no guarantee industrial policy will be effective – there is no proof that past ventures were successful because of industrial policy, or in spite of it.
But as Cohn points out in his column, something must be done to help Ontario’s economy. Do you think industrial policy is the answer? If not, to what alternatives might the government turn to stimulate the economy? Let us know in the comments.