Professor Ha Joon Chang recently published a book entitled Kicking away the ladder. It is useful to ponder on some of his views. The debate about best means to support entrepreneurs is an issue, which Prof. Chang tackles comprehensively. Above all, the need for industrial policies and balancing global and local interests are emphasized.

He shows how East Asian tigers developed targeted policies and supported local entrepreneurs. These proposals are at the centre of discussions on economic policy worldwide although global trade and investment rules make intervention less likely. However, we need to remember that all economies support entrepreneurs in specific ways and policies on competitiveness and support vary.

There is increasing agreement that, apart from Hong Kong, all developed economies industrialized via robust industrial and trade policies. This same route is now being denied to others thus the title of the book ?kicking away the ladder?. It is useful to highlight that, even in the USA, average tariffs on manufacturing from 1820 to 1945 were above 40 %. Having enjoyed such support for years, the developed countries can review uncritical support to their entrepreneurs although even here there is evidence of massive support, which has taken new shape.

As market failures continue to exist and as the need to establish new activities will always be felt in modern economies, the view of Prof. Chang that the ladder should not be kicked away would gain more importance. Tariffs may not be as important as they used to be, due to trade agreement commitments and developing countries must not support unworthy activities. The value of Prof. Chang?s book is in reminding us that economic development is not always automatic and state support in close interaction with the private sector in various cases will remain vital to sustain economic growth.

Of course, a counterpoint can still be made against support. The important issue to remember, in the context of globalisation, is that all developing countries would be better off in a finer balance between laissez-faire and state support. This coupled with macro-economics, skills, marketing, infrastructure, technology and sectoral policies should all combine to make higher growth rate feasible for more countries provided all are taken up concurrently and meaningfully. Industrial policies are clearly not ?passé? or futile.