Industrial policy, out of sequence

Industrial policy is back in vogue, and now the very institution that for 30 years has been telling us how bad it is has turned 180 degrees. The World Bank’s new flagship report, Industrial Policy for Development, admits that bank policy on industrial policy has not aged well, according to Chief Economist Indermit Gill, who said it now has the practical value of a floppy disk. It might seem like vindication for a nation such as Pakistan, which has always been looking for a policy lever that would enable the country to bring about sustained growth. It is not. Carefully read, the report isn’t about the need for activist intervention but about calibrating ambition with state capacity, and on that measure, Pakistan is far short.