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The book provides a comprehensive discussion of the controversial issue of industrial policy, drawing on some recent developments in economic theory in areas like political economy, institutional economics, industrial economics, and theories of technical progress. By integrating the analyses of political economy, economic institutions, and technical change into a single framework, the book offers policy conclusions which are of direct relevance to policy-makers. Drawing on the cases of Japan and Korea, the book also explores the economic and political conditions for the conduct of a successful industrial policy.