“Do you consider FDI (foreign direct investment) a form of Industrial Policy, broadly conceived? And should FDI be pursued by nation states, and where can it go off the rails?”
~ Mike D.
No, foreign direct investment is not industrial policy – and it requires a real confusion of cause and effect to label it as such. Certain government actions promoting or targeting a given industry or company are the literal definition of industrial policy, and some industrial policies may be done to attract FDI, but the FDI is not the policy but a consequence of the action. But FDI can (and does) take place all the time when it is a healthy and natural by-product of open markets for capital and goods and services, totally disconnected from government intervention via industrial policy. Market-driven capital allocation is the opposite of industrial policy, and for attractive countries, sectors, and companies, it can generate foreign investment very organically.
