Discipline to flourish: a framework for the political economy of discipline in industrial policy

Industrial policy has reemerged in response to issues as varied as climate crisis and national security. While recent industrial policy approaches prioritize state-business collaboration, historical evidence highlights the importance of achieving ‘discipline’ over key actors to enact structural change. Drawing from East Asian ‘developmental states’ and beyond, we propose a framework for analyzing industrial policy through the lens of discipline. We define discipline as anything that increases the alignment between private and social returns to capital and distinguish three types: information-sharing, rule-setting, and performance eliciting. Each involves distinct capacities and obstacles. By conceptualizing discipline as built iteratively through cumulative interventions, we address a gap in understanding how states form the capacity to implement industrial policies effectively. We examine this framework in light of shifts in the international political economy and suggest avenues for future research on industrial policy’s domestic and international impacts.