research
Working papers
2022
- The Who, What, When, and How of Industrial Policy: A Text-based Approach.R. Juhász, N. Lane, E. Oehlsen, and V.C. PérezAug 2022
Although questions surrounding industrial policy are fundamental, we lack both measures and comprehensive data on industrial policy. Consequently, scholars and practitioners lack a systematic picture of industrial policy practice. This paper provides a new, text-based approach to measuring industrial policy. We take the tools of supervised machine learning to a comprehensive, English-language database of economic policy to construct measures of industrial policy at the country, industry, and year level. We use this data to establish four fundamental facts about global industrial policy from 2009 to 2020. First, IP is common (25 percent of policies in our database) and has been trending upward since 2010. Second, industrial policy is technocratic and granular, taking the form of subsidies and export promotion measures targeted at individual firms, instead of tariffs. Third, the countries engaged most in IP tend to be wealthier (top income quintile) liberal democracies, and IP is very rare among the poorest nations (bottom quintile). Fourth, IP tends to be targeted toward a small share of industries, and targeting is highly correlated with an industry’s revealed comparative advantage. Thus, we find contemporary practice is a far cry from industrial policy’s past and tends toward selective, export-oriented policies used by the world’s most developed economies.
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@techreport{JLOP, title = {The Who, What, When, and How of Industrial Policy: A Text-based Approach.}, author = {Juhász, R. and Lane, N. and Oehlsen, E. and Pérez, V.C.}, year = {2022}, month = aug, } - The effect of industrialization on political dynasties: Evidence from Colombian local governments.V.C. PérezJul 2022
In this paper I find that industrialization reduces the concentration of political power, measured by the share of elected officials that were part of political dynasties, in the context of 19 Colombian departments. I use newly digitized data from departmental production by industrial sector since 1969 and the international price of manufactures as an exogenous source of variation in the industrialization levels. Using an instrumental variable approach, I find that an increase in one paid manufacturing employee reduces the share of elected individuals from dynasties by 1.15 p.p. Dividing the results by type of office indicates that the impact is more prominent in the election of dynastic individuals in the legislative brand compared to those elected in the executive one. One additional paid employee decreases the average share of dynastic mayors by 0.75 p.p., a 7.8% decrease in the average. On the other hand, an increase in a paid employee decreases the percentage of representatives from dynastic families by 3.24 p.p., which represents a diminution of 13.4%. I propose multiple mechanisms that could be driving these results including the relevance of industrialization to the creation of labor unions, and in the redistribution of resources such as education and income.
@techreport{PerezThesis, title = {The effect of industrialization on political dynasties: Evidence from Colombian local governments.}, author = {Pérez, V.C.}, year = {2022}, month = jul, url = {https://repositorio.uniandes.edu.co/handle/1992/59149}, }