HK University of Science and Technology professor of finance K.C. Chan has a piece in today's edition of Ming Pao (in Chinese) pretty much endorsing some sort of light-handed approach to industrial policy (his example is HK government's involvement in luring Disney to come to HK).
And I quote:
"如果我們絕對不容許政府冒風險，官僚因循不變的習性只會變本加厲。所以，政府的參與，關鍵在於有效獲取市場信息，適當地利用市場來達至政策目的，歸根究柢，這是如何增加政府官僚的判斷能力、提高政策執行能力的問題！且這些風險也是可以量化的，舉例說，假如迪士尼投資不像預期的成功，從商業營運的角度看，投資項目有賺有蝕，政府的成敗，也應從整體角度去衡量效益。"
Ooops, I can almost feel George Stigler rolling his grave!
Granted that Chan got his Ph.D. in finance at Chicago, not economics, but still it is hard to believe that with big names like George Stigler and Sam Peltzman at Chicago's graduate school, Chan is not aware of these scholars' views on such matters.
And if you read the piece, you will get the impression that he is not familiar with the cutting edge research in industrial policy as well. Regina Ip, another big fan of industrial policy, does deserve some credit on that score, as research reports put out by her think-tank do refer to the cutting edge research in industrial policy.
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