Relevance of ‘Policy Space’ for Development: Implications for Multilateral Trade Negotiations

Nagesh Kumar, Kevin P. Gallagher
JEL codes: 
RIS-DP # 120

This paper makes a compelling case for public intervention for fostering industrial development. We have also summarized evidence that suggests that present day developed countries have extensively employed infant industry protection, industrial policy and performance requirements, soft intellectual property protection regimes,
subsidies, government procurement and regional economic integration among other policies in their process of industrialization. Many of these policies have also been
effectively and successfully emulated by the newly industrializing economies in East Asia to build internationally competitive modern industries despite the lack of the
apparent comparative advantage. A development-friendly outcome of the Doha Round would provide flexibility from the TRIPs and TRIMs obligations for facilitating transfer of technology and building up local capabilities in developing countries besides allowing them adequate space for pursuing infant industry protection in the tariff reduction commitments.