Industrial Policy; State-Owned Enterprises; Technology Gap; Agent-Based Model

C63, J3 , E24, O1

How to conceive industrial policies as development instruments distinct from trade or fiscal-deduction interventions? How can we model and study the role of state-owned enterprises (SOEs) as agents of industrial policy? How can we model their main attributes and architectures? Drawing on the labour-augmented K+S agent-based model (ABM) in a two-country configuration, we propose an ABM aimed at analysing how SOEs may affect technological and industrial development, fostering economic growth and international competitiveness, in the context of a North-South, leader-laggard type of dynamics. Our objective is not simply to study the ex post out- comes of industrial policies, but rather to model SOEs as explicit economic agents potentially capable to drive industrial dynamics, institutional build-up, and, ultimately, growth. The results indicate that SOEs are a relevant policymaking instrument for these purposes.