Rebuilding the ladder? Contemporary contests over industrial policy

Does the greater embrace of industrial policy globally signal the emergence of a New Washington Consensus? We show that the multiplication of industrial policies, while consequential, signals neither normalisation nor consensus. Rather, industrial policy is increasingly the object of contestation over norms and practices of state interventionism. To substantiate our argument, we first analyse two competing attempts to articulate hegemonic visions of industrial policy, development, and world order: a ‘conservative’ vision formulated by the WTO, OECD, World Bank, IMF, and a ‘transformative’ project led by Southern powers through the G20. We then investigate whether developing countries possess greater industrial policy space. While some ideational and legal constraints have been loosened, a state's capacity to autonomously design and implement industrial policy remains shaped by its relative position within global financial and monetary hierarchies, its insertion into global supply chains, and its strategic positioning vis-à-vis emerging geopolitical competition. Rates of policy adoption and policy tools are, therefore, diverging. Advanced economies extensively deploy industrial policy with relative ease, geostrategically important emerging economies enjoy selective flexibility to pursue industrial policy, yet low-income countries are at risk of further marginalisation. This ‘three-tiered’ hierarchy is both a reflection and an outcome of contestation over industrial policy.