Kaplinsky, Raphael and Mhlongo, Edmund
Infant industries and industrial policy: a lesson from South Africa.
The debate on industrial policy is often counterposed between two truisms. On the one hand, market-based resource allocation is clearly important - 'it is not nations which compete, but individual firms'. On the other hand, firms operate in the context of 'created endowments' such as physical infrastructure and the education and training of their labour forces, so it is no so much that enterprises compete, but rather that they do so in the context of national endowments which are open to augmentation by government action (Reich, 1991).
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