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RESEARCH PRODUCT

A Fourfold Justification of Common Industrial Policy

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Most industries need wider regions to flourish. Conversely, most regions need some industries to grow; few can live on agriculture or services alone. However, the interplay of industries and regions is not yet sufficiently developed in African economic practice. This chapter develops a fourfold technical argument for common industrial policy (CIP) in African RECs. Part of the argument is that African RECs already engage in such joint policies, but under different names and not in the required sequence. The opportunity for a regional union to act as a lock-in mechanism for such structural policies is also discussed. Up until now, advanced economy RECs have viewed CIP as a third-rank policy area. Little can be learnt from them, even after the recent turn towards a new European industrial policy, which is analysed for comparison’s sake. This chapter concludes by arguing that developing country RECs have a greater systemic need than advanced economies for such joint policies to avoid disintegration.