Final answer:
Industrial policy refers to government interventions to promote specific industries. Proponents argue it fosters growth, employment, and innovation. Critics claim it distorts markets and creates unfair advantages.
Step-by-step explanation:
Industrial policy refers to a set of government interventions aimed at promoting the growth and development of specific industries within a country. These interventions can include subsidies, trade protection, tax incentives, and targeted investments. Proponents of industrial policy argue that it can help in nurturing emerging industries, generating employment, fostering innovation, and promoting economic development. However, there are also criticisms against industrial policy, with opponents arguing that it can distort market mechanisms, lead to inefficiencies, encourage rent-seeking behavior, and create unfair advantages for certain industries. The effectiveness of industrial policy depends on a variety of factors, including the country's specific context, the goals and objectives of the policy, and the implementation approach.