Lessons for African Economies from Irish and East Asian Industrial Policy

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Abstract

When comparisons in terms of industrial policy lessons to be learned have taken place, it has tended to be solely vis-a-vis the ‘development state’ East Asian experience. This paper broadens the analysis and considers lessons which African countries can learn from other so-called ‘tiger’ economies including Ireland and the East and South Asian countries. We recognise that the latter are indeed clearly significant as many African countries at the time of independence had economic structures and levels of income quite similar to East Asian countries, yet have grown at vastly different rates since then. Exploring why this has been the case can thus offer important insights into possibilities for industrial policy. Yet this comes with some health warnings over East Asian experience. We suggest that another important contribution can come by looking at the Irish example, given its emphasis on corporatism rather than simply relying on state direction in the operation of industrial policy. The Irish model is also more democratic in some senses and has protected workers’ rights during the development process in contrast to the often highly dirigisite East Asian model. Overall we suggest that some immediate actions are needed, notably with regard to the financial system in small African economies. Without such changes, a poorly functioning financial system will continue to keep investment at low levels. In relation to the small size of the African economies, the paper recommends regional integration and sufficient overseas development assistance (ODA) for infrastructural development. It is also critical to note that the various small African economies each face their own industrial and economic development challenges, and that a ‘one size fits all’ approach is not appropriate; rather the key is to tailor policies and systems to the unique opportunities and development challenges in each African country.

Keywords

industrial policy Ireland East Asia economic development FDI small firms 

JEL Classification

F23 L52 L53 O2 P16 
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Notes

Acknowledgements

Helena Lenihan worked on this paper whilst a Visiting Fellow at the CBR, Judge Business School, University of Cambridge and concurrently at Wolfson College, University of Cambridge, UK and finally at CSME, Warwick Business School, University of Warwick, UK.

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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Department of Applied ManagementCoventry University Business School, UKCoventryUK
  2. 2.Department of Economics, Kemmy Business SchoolUniversity of LimerickLimerickIreland
  3. 3.Judge Business SchoolUniversity of CambridgeCambridgeUK
  4. 4.University of Birmingham Business SchoolBirminghamUK

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