Industrial Policy in Guatemala: A Case of Policy Inertia under Changing Paradigms

This paper reviews productive development policies (PDPs) in Guatemala, focusing on the alleged justification of existing programs in terms of the market or government failures they are meant to address. An effort is made to identify how the different instruments complement or contradict each other and how these situations came to be. The main hypothesis throughout the paper is that there are non-trivial contradictions within the set of PDPs and its implementation framework that render policy instruments ineffective or inefficient, with evidence from several case studies. On this basis and in light of international practices, the study develops a broad set of recommendations for improving the design and implementation of Guatemala’s PDPs.