Criticism
The main criticism against industrial policy arises from the concept of government failure. Industrial policy is seen as harmful as governments lack the required information, capabilities and incentives to successfully determine whether the benefits of promoting certain sectors above others exceeds the costs and in turn implement the policies. The East Asian Tigers provided successful examples of heterodox interventions and protectionist industrial policies, industrial policies such as import-substitution-industrialization (ISI) has failed in many other regions such as Latin America and Sub-Saharan Africa. Governments in making decisions with regard to electoral or personal incentives can be captured by vested interests, leading to industrial policy would only supporting rent-seeking the political elite, while distorting the efficient allocation of resources by market forces at the same time.
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