Big push or big failure? On the effectiveness of industrialization policies for economic development

Bjorvatn, Kjetil, and Coniglio, Nicola Daniele-Big push or big failure? On the effectiveness of industrialization policies for economic development The role of the government in industrialization is heavily debated. Some claim that extensive government involvement is key to initiate a sustainable development process, others see the government as an obstacle to it, pointing to the importance of government failure. We formulate a model, which explains why even a highly inefficient industrial policy can successfully promote big-push development. Moreover, we show that extensive government intervention is more likely to be successful when the initial level of development is low. J. Japanese Int Economies 26 (1) (2012) 129-141. NHH Norwegian School of Economics, Helleveien 30, 5045 Bergen, Norway: University of Bari, Piazza Umberto I, 1-70121 Bari, Italy. (C) 2011 Published by Elsevier Inc.