Will Industrial Policy Help Economically Distressed Places?

Spurring economic growth in America’s declining cities and regions has been a hard-to-achieve goal of public policy. There’s now hope that the Biden Administration’s new industrial policies, might boost growth where other efforts have failed. But the jury is still out.

Industrial policy—supporting specific industries and sectors of the economy—has long been viewed skeptically by mainstream economists. It is caricatured as “picking winners and losers” and substituting government decisions for markets, leading to ineffective and wasteful spending.