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This paper studies three horizontal policy instruments and two vertical ones in Chilean industrial policy, particularly regarding small and medium enterprises (SMEs). The horizontal instruments are (1) a guarantee program for borrowing by SMEs (FOGAPE), (2) a small subsidy to new exports that was applied from 1985 through 2003, and (3) the innovation subsidies provided by the Corporación de Fomento de la Producción (CORFO). The vertical policy instruments are the activities of Fundación Chile (FCh), a semi-public entrepreneur cum venture capitalist, and a CORFO program to attract foreign direct investment in information technology. Although most programs are well designed, they are numerous and insufficiently funded; Chile could benefit from a prioritization of needs and consolidation of these programs. Moreover, the instruments for making strategic bets on new sectors are particularly weak. In particular, FCh needs to refocus its activities on high-risk projects with long payoffs, something it cannot do with its small endowment.
This paper summarizes the findings of the recent Inter-American Development Bank book Two to Tango: Public-Private Collaboration Productive Development Policies, based on case studies of 25 productive development policies (PDPs) in five countries and discusses an additional example from Peru. One finding that emerges from those studies is that governments could not make policy in isolation and nee ... (View publication)
Within the broad spectrum of public policies promoting productive development (PDPs), this paper focuses on “design promotion” policies, which see design as a tool for innovation, differentiation, and competitiveness. We studied the lead government agencies in charge of design-focused PDPs in the national government and in the Autonomous City of Buenos Aires (CABA). Some of the paper’s main findin ... (View publication)
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