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Strengthening Capabilities for Inclusive and Sustainable Industrial Policy in Developing Countries
UNIDO / GDC / GIZ / DIE
Policy Workshop
15 – 16 September 2014German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Bonn
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Policy Workshop
“Strengthening capabilities for inclusive and sustainable industrial policy
in developing countries”
Venue: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Tulpenfeld
6, 53113 Bonn
Date: 15 – 16 September 2014
In order to catch up with more advanced countries, low- and lower-middle income countries
need to diversify their economies and accelerate structural change. In view of multiple
market failures and huge capability gaps between local companies and their foreign
competitors, few experts question the need for industrial policies. But two major issues are
very much open to controversial debate:
First, what does “inclusive and sustainable industrial policy” mean in the context of low- and
lower-middle income countries? In many of these countries, the bulk of the workforce is
engaged in informal microenterprises; the share of reasonably productive and internationally
competitive firms and jobs (those usually targeted by industrial policies) tends to be very
small. What, then, can industrial policy do to deal with informality and small-scale productive
activities in an inclusive way? At the same time, an increasing number of low- and lower-
middle income countries have adopted “green growth” strategies, but these are not yet well
aligned with their industrial development strategies. What does “green industrial policy” imply
for these countries? Do they have to set the course for a new type of resource-efficient
growth to avoid being locked into unsustainable growth paths, or should they first of all
exploit their growth potential to reduce poverty quickly, taking into account that their per
capita resource consumption is generally low?
Second, how much hope can we set in strategic industrial policies in environments where
public administration typically lacks resources and capabilities, and informal institutions are
deeply entrenched in public decision-making processes? Many developing countries do not
have established routines of evidence-based policy-making and also face a shortage of
adequately trained national analysts and programme implementers. This may lead to an
extensive dependency on international advisers, unrealistic strategic objectives, ad-hoc and
uninformed decision-making, and the deployment of inappropriate policy tools. Moreover,
public and private spheres of decision-making are never clearly separated, as in an ideal-
type Weberian welfare-oriented agency. Hence, clientelism and collusive behaviour are
hardly evitable, especially when policies target specific firms, sectors or regions. In such
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conditions, attempts to correct market failures may actually lead to even worse outcomes. In
a nutshell, the countries that most urgently need industrial policies may be the least capable
of managing them well. While this dilemma is widely acknowledged, there is little agreement
on how to deal with it. Some scholars are hopeful, pointing to the fact that some of the most
successful economies started their industrial take-off despite weak governance; many Asian
countries created institutions for industrialization and growth and started improving their
governance only later. More pessimistic scholars show that selective policies are particularly
prone to political capture and may thereby “fuel” corruption and stabilize exclusive political
arrangements; hence, they argue for a certain minimum of transparency, accountability and
good public management practices before major selective interventions are made.
These questions are enormously relevant for practitioners who need to take tough decisions
about reform sequences; invent and test innovative ways of ensuring service delivery in an
environment of limited government capabilities; help creating pockets of efficiency in the
bureaucracy and scaling them up, and so on. In this context, UNIDO and GIZ have joined
forces to develop an integrated methodological toolbox and a capacity-building package for
industrial diagnosis. The project “EQuIP – Enhancing the Quality of Industrial Policies” aims
to support policymakers in developing countries to formulate and design evidence-based
strategies for inclusive and sustainable industrial development. At the core of EQuIP is an
institutional capacity-building package to train public servants and analysts for public policy
to be based on informed decisions and a critical examination of empirical evidence. EQuIP
compiles globally available industrial performance and capability measurement approaches
as well as a number of tailor-made new methodologies that also take the social and
environmental dimensions of industrial development into account. The different modules of
the toolbox will cover topics such as industrial growth, sectoral performance, diversification,
export quality, productive employment generation, and greening of industry.
This two-day workshop will bring together industrial policy experts to discuss the key pillars
of inclusive and sustainable industrial development, review the rationale underlying the
EQuIP approach, and validate a preliminary version of the EQuIP toolbox. The workshop
addresses international scholars, donor agencies, international development agencies and
practitioners from both developing and advanced economies.
Day 1 of the workshop will feature discussions at a more conceptual level on industrial
policy-related capabilities and governance issues for inclusive and sustainable industrial
development. The last session of the day then introduces the EQuIP toolbox. Day 2 of the
workshop will focus more narrowly on the EQuIP toolbox and concentrates on a more
technical appraisal thereof. The idea is to validate the different tools in their preliminary
version. A draft version of the toolbox will be shared with all participants at the beginning of
September. The workshop is intended to be very interactive, and all participants are strongly
encouraged to share their views and comments on the issues discussed.
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Day 1 (Monday 15 September, 10:00 – 18:00)
10:00 – 10:15 Welcome and introduction: “Industrial policy challenges in low- and lower- middle income countries” – Tilman Altenburg (DIE) and Michele Clara (UNIDO)
SESSION 1 THE TARGET SYSTEM OF INCLUSIVE AND SUSTAINABLE INDUSTRIAL POLICY Which trade-offs are relevant in low- and lower-middle-income countries?
10:15 – 10:35 Raphael Kaplinsky (The Open University): Industrial policies when most people are poor
10:35 – 10:55 Anna Pegels (DIE): The need for green industrial policies and how to link them with the inclusiveness agenda
10:55 – 11:10 Coffee break
11:10 – 11:35 Q&A and open discussion Moderator: Hubert Schmitz (Institute of Development Studies, IDS)
11:35 – 12:35 Panel discussion: Inclusive and sustainable industrial policies for low- and lower-middle-income countries
Raphael Kaplinsky (Open University), David Kaplan (University of Cape Town), Tilman Altenburg (DIE), Cornelia Staritz (Austrian Foundation for Development Research)
12:35 – 13:15 Open discussion Moderator: Wilfried Lütkenhorst (DIE)
13:15 – 14:15 Lunch break
SESSION 2 THE INDUSTRIAL POLICY GOVERNANCE CHALLENGE Industrial transformation or good governance – what comes first?
14:15 – 14:35 Mushtaq Khan (School of Oriental and African Studies, Univ. of London): Good governance is not a precondition of successful industrial policy
14:35 – 15:35 Panel discussion: Industrial policy without good governance? Michael Hansen (Copenhagen Business School), Mushtaq Khan (SOAS), Akbar Noman (Columbia University), Robert Wade (London School of Economics), Lindsay Whitfield (Roskilde University)
15:35 – 16:15 Q&A and open discussion Moderator: Tilman Altenburg (DIE)
16:15 – 16:30 Coffee break
SESSION 3 IMPROVING INDUSTRIAL POLICY MANAGEMENT CAPABILITIES What can the EQuIP toolbox contribute?
16:30 – 17:00 Philipp Neuerburg (UNIDO) & Eiko Kauffmann (GIZ): The EQuIP toolbox: Strengthening industrial policy management capabilities to increase policy effectiveness in low and lower-middle income countries
17:00 – 18:00 Q&A and open discussion
18:00 – 18:15 Wrap-up and key take-aways Moderator: Natascha Weisert (BMZ)
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Day 2 (Tuesday 16 September, 09:00-17:30)
9:00 – 9:15 Philipp Neuerburg (UNIDO): Introduction to EQuIP and the toolbox
SESSION 4 INDUSTRIAL GROWTH, STABILITY, DIVERSIFICATION, EXPORT PERFORMANCE AND THE ROLE OF THE DOMESTIC MARKET
9:15 – 9:45 Input: Thomas Bernhardt (UNIDO) 9:45 – 10:45 Discussants: Cornelia Staritz (Austrian Foundation for Development Research),
Annalisa Primi (OECD Development Centre) Q&A and open discussion
10:45 – 11:00 Coffee break
SESSION 5 SOCIAL DIMENSIONS OF INDUSTRIAL DEVELOPMENT: INCLUSIVENESS & PRODUCTIVE EMPLOYMENT
11:00 – 11:30 Input: Amanda Janoo (UNIDO) 11:30 – 12:30 Discussants: Tilman Altenburg (DIE), José Manuel Salazar (ILO)
Q&A and open discussion
12:30 – 13:30 Lunch break
SESSION 6 ENVIRONMENTAL DIMENSIONS OF INDUSTRIAL DEVELOPMENT: GREENING OF INDUSTRIES AND GREEN INDUSTRIES
13:30 – 14:00 Input: Stephan Lutter (Vienna University of Economics and Business) 14:00 – 15:00 Discussant: Georgeta Vidican (DIE), Olivier Vardakoulias (New Economics
Foundation) Q&A and open discussion
15:00 – 15:15 Coffee break
SESSION 7 IDENTIFYING THE DRIVERS OF INCLUSIVE AND SUSTAINABLE INDUSTRIAL DEVELOPMENT AND DERIVING IMPLICATIONS FOR INDUSTRIAL STRATEGY FORMULATION
15:15 – 15:45 Antonio Andreoni (SOAS, University of London and Cambridge University) 15:45 – 16:15 Discussant: Hubert Schmitz (IDS), Lindsay Whitfield (Roskilde University)
Q&A and open discussion
SESSION 8 MULTIPLE TARGETS, INCREASING COMPLEXITY, GOVERNANCE CHALLENGES: WORKSHOP INSIGHTS FOR POLICYMAKERS AND THE EQuIP TOOLBOX
16:15 – 17:15 Open discussion Moderator: Antonio Andreoni (SOAS, University of London and Cambridge University)
17:15 – 17:30 Susanne Dorasil, BMZ: Final remarks and closing
Your directions to the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)
Tulpenfeld 6 D - 53113 Bonn
From Bonn Central Station (Hauptbahnhof): Take the U-Bahn U 16/ U 63 or U 66 to “Heussallee/Museumsmeile”. Take the exit Heussallee. Turn right after 50 m onto the footpath towards the office complex 'Tulpenfeld'. Follow the signs across Tulpenfeld to the building of DIE at Tulpenfeld 6.
The buses No. 610 and 611 run from the train station Bonn Hauptbahnhof to the bus stop “Heussallee/Museumsmeile”. Turn onto the footpath towards the office complex 'Tulpenfeld'. Follow the signs across Tulpenfeld to the building of DIE at Tulpenfeld 6.
Tulpenfeld 6 53113 Bonn
Dr. Tilman Altenburg Email [email protected] Telephone + 49 (0) 228 - 94 92 7 - 182 Fax + 49 (0) 228 - 94 92 7 - 130 [email protected] | www.die-gdi.de | www.facebook.com/DIE.Bonn
For organizational questions:
Dr. Sonja Neweling Email [email protected] Telephone + 49 (0) 228 - 94 92 7 - 244 Fax + 49 (0) 228 - 94 92 7 - 130 [email protected] | www.die-gdi.de | www.facebook.com/DIE.Bonn
Philipp NeuerburgEmail [email protected] Telephone + 43 -1 26026 - 0 Fax + 43 -1 2692-69
[email protected] | www.unido.org
