Has the World Bank performed a U-turn on industrial policy?

Illustration: Álvaro Bernis

Apr 23rd 2026|5 min read

SINCE 1980 the World Bank and the IMF have stuck to a plan. When countries on the brink of financial collapse come to them, the institutions extend fresh loans and coax creditors to take haircuts in return for liberal reforms. In 1993 a report from the bank titled “East Asian Miracle” grudgingly admitted that the growth of Japan and South Korea in preceding decades may have been aided by governments’ illiberal picking of industrial winners. But that was largely a matter of luck. For other countries, the report declared, “The promotion of specific industries holds little promise.” The “Washington Consensus” of free markets, sober fiscal policies and private enterprise would carry the day.