The recent revival of industrial policy offers an opportunity to break the old pattern whereby economic risks are socialized while rewards remain privatized. In addition to attaching meaningful conditionalities to public support, governments must invest in the state capacity required to govern strategic sectors well.
LONDON—In the United Kingdom, government intervention in the private sector has long focused on rescuing firms from mishaps and mistakes. With policies oscillating between privatization and emergency nationalizations, the state has consistently failed to build the governance infrastructure that would enable either approach to serve the common good.