The scope for industrial policy in a free trade environment

Vol. 13 No. 3 (1993)

Jul-Sep / 1993
Published July 1, 1993

How to Cite

Jr., José Tavares de Araujo. 1993. “The Scope for Industrial Policy in a Free Trade Environment”. Brazilian Journal of Political Economy 13 (3):441-53.

The scope for industrial policy in a free trade environment

José Tavares de Araujo Jr.
From Interamerican Development Bank – IDB, Washington/DC, United States
Brazilian Journal of Political Economy, Vol. 13 No. 3 (1993), Jul-Sep / 1993, Pages 441-453


The article discusses the contemporary dilemma of industrial policy, which consists
of defining national growth strategies consistent with the dynamics of a globalized
economy. The argument consists of three parts. The first suggests that the concept of firm
proposed by Coase in 1937 is a fundamental instrument for analyzing the changes that occurred
in the 1980s in international competition standards. The second describes the domestic
dimension of the industrial policy dilemma, showing the macroeconomic restrictions and
the role of the institutions that regulate economic power. The third considers the international
dimension, highlighting the importance of GATT as a forum for negotiating conflicts
between domestic policies and international interests.

JEL classification: F13; F68.

Keywords: Industrial policy globalization trade