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. The ability to implement old style industry policy was dependent upon the state's, bureaucratic capacity and political capacity. Bureaucratic capacity refers to the competence and cohesiveness of the bureaucracy. Political capacity refers to the extent to which the state was insulated from rent seeking demands yet embedded enough within society to carry society along with its goals. The twin forces of democratization and deregulation have resulted in diminished bureaucratic and political capacity to undertake the detailed supervision of industries required by the industry policy of the past.
