ABSTRACT
INTRODUCTION This chapter1 is concerned with analysing the implications of an industrial policy in Europe for industrialization and economic development in the Third World. Over the last decade or more, by postSecond World War standards, the industrial countries of the North have been experiencing extremely high rates of unemployment. The workers and trade unionists in these countries increasingly blame competition from cheap labour products from the developing economies for these job losses. Hence the growing populist demands for protection in one form or another in many of these countries. In this context a central analytical question is to what extent, if any, does the industrialization of the South harm the North’s industry and workers. If the consequences are indeed harmful-and that proposition, as we shall see below, is far from being obvious, and needs to be carefully established-the challenging policy question is what kind of industrial policy in Europe will minimize these harmful consequences, and at the same time be not inimical to industrial development in the South. Put more simply, a main issue examined in this chapter is the policy configuration, including both global economic policies and institutional arrangements as well as the more narrow industrial policies in the North, which would make industrial development in both the North and the South a positive rather than a zero or a negative sum game.
