ABSTRACT
A sea change may be underway in industry policy in many of the East Asian states within APEC. The old idea of industry policy where states sought to alter their industrial structure through the deliberate guidance and supervision of industry is giving way to newer ideas of maintaining international competitiveness through competition policy. This chapter commences with an explanation of old style industry policy and its institutional underpinnings – bureaucratic and political capacity. It then shows how the twin forces of democratization and deregulation have undermined the capacity of the state to implement old style industry policy. Next, the chapter presents an analysis of competition policy and APEC’s role in seeking to establish it as the new industry policy for member economies. Finally, an argument is made that greater adherence to a rule of law will be necessary to restore sufficient bureaucratic and political capacity to make the new style industry policy workable.
