Interventions in Manufacturing: Main Findings
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This chapter synthesizes the findings of the three previous chapters and explains Sri Lanka’s manufactured export performance using the technological capabilities approach (see Chapter 2). Macroeconomic fluctuations and political instability probably also affected that performance. While recognizing the relevance of these factors, our analysis focuses on the interplay of incentives and supply-side factors as suggested by the capability approach. Both of these determinants may be prone to market failures and carefully designed government interventions (collectively termed ‘industrial policies’) may be necessary to remedy them.
KeywordsForeign Investment Market Failure Trade Liberalization Industrial Policy Political Instability
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