The scope for industrial policy in a free trade environment

ABSTRACT The article discusses the contemporary dilemma of industrial policy, which consists of defining national growth strategies consistent with the dynamics of a globalized economy. The argument consists of three parts. The first suggests that the concept of firm proposed by Coase in 1937 is a fundamental instrument for analyzing the changes that occurred in the 1980s in international competition standards. The second describes the domestic dimension of the industrial policy dilemma, showing the macroeconomic restrictions and the role of the institutions that regulate economic power. The third considers the international dimension, highlighting the importance of GATT as a forum for negotiating conflicts between domestic policies and international interests.