Welcome to Research Insights, a knowledge space dedicated to collecting, condensing, and communicating policy-relevant findings from our team's research. Each edition offers concise and accessible summaries of the most impactful studies, ensuring that policymakers, practitioners, and stakeholders stay informed about the latest developments and evidence in the field. Our goal is to bridge the gap between complex research and practical application, fostering informed decision-making and effective policy design.
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March 2026 | Industrial Policy for Development: Approaches in the 21st Century
Amidst slower global growth, a shifting labor market, and rising protectionism, governments around the world are increasingly turning to a once controversial policy. The World Bank’s new Policy Research Report, Industrial Policy for Development, responds with a pragmatic framework that moves beyond the old question of whether governments should engage in industrial policy towards how to do so effectively and efficiently. Drawing on new evidence from more than 60 economies, the report shows that industrial policy is not a single instrument, but a broad toolkit whose success depends on matching policy choices to country characteristics, institutional capacity, and fiscal space.
To accompany the launch of the report, this edition of Research Insights looks closely at how some of these key industrial policy tools operate and under what conditions they deliver results. New evidence on export‑led industrial policy highlights how data on market growth, competition, and comparative advantage can help countries assess risks when targeting sectors. Trade promotion organizations can play a countercyclical role during global downturns. Preferential trade agreements (PTA) can provide a framework for cooperative approaches to industrial policy, buffering adverse effects for member countries. Finally, labor market and skills policies such as training and job search assistance can also be part of modern industrial strategies when aligned with firms’ needs and embedded within broader demand‑side strategies.
💡 Research Highlights:
| Export‑Led Industrial Policy: What Can Low- and Middle-Income Countries Do? Tristan Reed (Development Research Group) | |
| Export‑led growth remains one of the most reliable pathways for poverty reduction, yet governments often struggle to decide which sectors to support. While perfectly “picking winners” is impossible, countries can assess the risk of picking losers by using data on market growth, global competition, comparative advantage, technological relatedness, and competitive advantage. What to target? In general, countries should target markets with quick growth and soft competition. Low-risk approaches target industries with demonstrated comparative advantage, while higher-risk approaches can aim to build new advantages. Many countries take too little risk. Export promotion agencies, sector‑specific infrastructure and regulation, quality certification systems, and structured public‑private dialogue give low‑ and middle‑income countries practical tools to advance competitive export industries while staying within trade rules. Read more> |
| The Impact of Trade Promotion Organizations Yewon Choi (Development Research Group), Ana Margarida Fernandes (Development Research Group), Arti Grover (International Finance Corporation), Leonardo Iacovone (Trade, Investment and Competitiveness), Marcelo Olarreaga (University of Geneva) | |
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| Trade Promotion Organizations (TPOs) play a key role in implementing industrial policy through market access and export support—but can they deliver during crises? Using evidence from the COVID‑19 pandemic, this study shows that increased funding for TPOs significantly boosted exports during global trade downturns, but delivered no measurable benefits during recoveries. The gains were driven by helping firms expand existing products and destinations rather than enter new markets. Surprisingly, e‑commerce training programs reduced export performance during downturns, likely by diverting scarce resources away from more effective support, particularly in sectors less suited to online trade. The findings highlight the importance of countercyclical trade promotion budgets and careful prioritization of instruments to strengthen export resilience during future shocks. Review of International Economics | Working Paper |
| Trade Effects of Industrial Policies: Are Preferential Agreements a Shield? Alessandro Barattieri (East Asia and Pacific Chief Economist Office), Aaditya Mattoo (Development Research Group), Daria Taglioni (Development Research Group) | |
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| Industrial policies can alter market access and negatively affect trade partners. This study shows that preferential trade agreements (PTAs) can buffer these adverse effects: countries sharing a PTA with the policy‑implementing country experience smaller trade disruptions. Several mechanisms explain this shielding effect. PTAs typically involve lower tariffs and fewer non-tariff barriers, disciplines limiting discriminatory subsidy design, greater regulatory and standards alignment, and policy certainty created by binding commitments. Together, these features help preserve market access for members even when industrial policies intensify. While PTAs can provide a framework for cooperative approaches to industrial policy, exporters outside such agreements bear the full cost of exclusion. As industrial policy expands globally, non-member countries risk increasing disadvantages in global markets. Journal of Policy Modelling | Working Paper |
| Job Training and Job Search Assistance Policies as Industrial Policy Tools David McKenzie (Development Research Group) and Eliana Carranza (Social Protection and Labor) | |
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| Sector‑targeted skills development programs can support firms’ adoption of new technologies and workers’ transition into more productive jobs by addressing underinvestment in training and coordination failures between firms and workers. While the impacts of government‑led job training and job search assistance are often modest in low‑ and middle‑income countries, effectiveness improves when training is closely linked to market demand and when job search programs reduce information and mobility frictions. Interventions that encourage jobseekers to explore new locations, provide targeted information to update labor market beliefs, and enable credible skill signaling through certification show potential. Overall, skills policies are most effective when paired with broader demand-side strategies that foster job creation by increasing firm productivity and promoting economic growth. Read the paper or see related blog> |
📰 News and Upcoming Events
- What Works for Jobs? Our March Research Newsletter is out, and it highlights evidence on how the right mix of foundations, policies, and finance can rise to the jobs challenge of the next decade.
- March 30: Tune in to first day of the 10th Urbanization and Development Conference “Jobs, Cities, and Development.” Check out the full agenda here.
- April 1, 9:00 am ET: Learn more about the report "Industrial Policy for Development" with this event hosted by the Peterson Institute of Economics for Development (PIIE).
- April 20, 12:30 pm ET: Standards make everyday life run smoothly, yet, they're often overlooked by policymakers in developing economies. Tune it to our next Policy Research Talk "Standards for Development" featuring the World Development Report 2025.


