Mushtaq Khan Professor of Economics, University of London "Getting the Incentives Right for Industrial Policies  -- Part 2" 1. Daewoo and Desh team up www.youtube.com/watch?v=ep8TP0XR9ng 2. The Daewoo-Desh incentive structure www.youtube.com/watch?v=ci5OqYEhaz0 3. Suzuki and Maruti team up www.youtube.com/watch?v=XYfa7j_uENw 4. Need greater flexiblity with small-scale experiments www.youtube.com/watch?v=fBwz3AJTu6s As developing countries increasingly experiment with "industrial policies," a big question is how to get the incentives right for these policies to work. The JKP recently spoke with an expert on the topic -- Mushtaq Khan, Professor of Economics at the School of Oriental and African Studies, University of London. In Part 2 of this series, he explores two successful examples in the 1980s -- launching a garment industry in Bangladesh and producing Indian automobiles. Going forward, however, he cautions that many developing countries will have to make industrial policies work in a setting where the political environments, governance capabilities, and private sector capabilities are much weaker. This will mean starting with small-scale experiments, rather than ambitious endeavors, to avoid doing long-term damage.

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