Industrial Policy in a Globalized Era: Integrating Power, Institutions, Agency, and Transnational Forces

Industrial policy has re-emerged as a central concern of economic strategy, yet dominant frameworks − most notably the developmental state and political settlements − still offer only partial explanations of how states pursue industrial transformation under the pressures of globalization. This article develops a multi-level perspective that connects domestic politics, institutional capacity, leadership agency, and transnational forces within a single analytical frame. It argues that the effectiveness of industrial policy depends not on any one of these domains alone, but on how they interact and reinforce − or undermine − one another across scales of governance. Drawing on the experiences of South Korea (1961–1979) and Malaysia (1981–2003), the paper shows how similar developmental ambitions yielded varying degrees of success, reflecting differences in bureaucratic autonomy, coalition cohesion, and the ability to navigate global regimes and value-chain dynamics. The analysis suggests that successful industrial policy in a globalized world requires both embedded and autonomous institutions, adaptive and committed leadership, and the capacity to negotiate a viable policy space within transnational constraints. The framework thus contributes to a broader research agenda on global industrial policy, linking domestic governance to the evolving architecture of globalization that now shapes industrialization itself.