This working paper, published by the International Monetary Fund (IMF), evaluates the extensive wave of industrial policies implemented across the Asia-Pacific region between 2009 and 2024. Utilizing machine-learning and clustering approaches, the study reveals that while roughly 75% of these interventions—primarily subsidies—are ex-ante aligned with structural transformation strategies like technological upgrading, their real-world, ex-post economic impacts are disappointing. Gains in trade, competitiveness, and firm performance remain small and short-lived. To foster sustained transformation and minimize net costs, the authors argue for a more parsimonious, carefully targeted policy design anchored in addressing specific market failures.
