Professor Shang-Jin Wei’s Paper “The United States as an Active Industrial Policy Nation” is Published in NBER Working Paper Series | Academic

Release time：2026-01-29    

Recently, the article entitled The United States as an Active Industrial Policy Nation, co-authored by Shang-Jin Wei, Academic Visiting Professor in Finance and Economics of FISF and Tenured Chair Professor at Columbia University, Jiandong Ju, Chair Professor at PBC School of Finance, Tsinghua University and Director of Center for International Finance and Economic Research (CIFER), and Yuankun Li, Assistant Research Fellow at the Institute of World Economics and Politics, Chinese Academy of Social Sciences, has been published in National Bureau of Economic Research (NBER) Working Paper Series as Paper No. w34744.

Professor Introduction

Shang-Jin Wei

Academic Visiting Professor in Finance and Economics of FISF

Tenured Chair Professor at Columbia University

Main contents of the paper:

By employing large language model (LLM) technology combined with manual review to conduct a textual analysis of all 12,167 Congressional Acts and 6,030 Presidential Orders issued in the United States between 1973 and 2022, the paper systematically constructs a database of U.S. industrial policies and characterizes their historical evolution. The study reveals the following stylized facts:

First, the U.S. has long been an active practitioner of industrial policies. Contrary to the common perception of the U.S. as a proponent of laissez-faire, the country maintains a consistently high level of industrial policy activity throughout the entire sample period, regardless of which party is in power, with 5.4 laws and 3.4 Presidential Orders per year on average containing new industrial policies.

Second, existing databases significantly underestimate the number of industrial policy instances. The study identifies roughly 4 times (approximately 300% more) instances of industrial policies than those in the Global Trade Alert (GTA) database during 2008-2022, despite using essentially the same definition.

Third, “national security” has been at least as important as “enhancing industrial competitiveness” as a driver of industrial policies. Statistics show that the frequency of industrial policies justified by “national security” is essentially on par with those justified by “enhancing industrial competitiveness”.

Fourth, U.S. industrial policies are embedded with mechanisms designed to mitigate potential efficiency losses. Many of them incorporate design features that help mitigate potential drawbacks, such as explicit “sunset clauses” (expiration dates), local content requirements with price limitations, and pilot programs for emerging technologies. 

Finally, the economic structure has been significantly reshaped. Based on stock market reactions and firm performance, these industrial policies have played a substantial role in guiding resource allocation and have had a pronounced impact on the structural composition of the economy.