The Study of Industrial Policy beyond the Hegemons

Industrial policy turmoil in non-hegemonic powers: sectoral policy undone by broader economic policies in the Turkish garment industry

This seminar examines the changing dynamics of industrial policy through the recent article, “Industrial policy in turmoil: sectoral policy undone by macroeconomic instability and rising production costs in the Turkish garment industry”, published as part of the special issue titled Bridging comparative and international political economy for the study of industrial policy beyond the hegemons.

The special issue brings together comparative and international political economy approaches to explain the transformation of industrial policy among non-hegemonic powers (NHPs). These countries face structural constraints within the global economy, yet their domestic institutions and political dynamics shape how they navigate these constraints and seek to exploit opportunities arising from the declining power of the US and its allies. The result is a diverse constellation of alternative economic policies to aimed at supporting domestic industries and strengthening their position amid geopolitical shifts.

Four cross-cutting findings emerge from the contributions. First, industrial policy is conditioned by the historical legacies of each country’s positioning in the global economy. Second, exposure to unstable geoeconomic competition exerts a decisive influence on industrial policy. Third, domestic institutions and political dynamics mediate the effects of external pressures. Fourth, while industrial policy may improve competitiveness in exceptional cases, it often comes at the expense of new inequalities for NHPs.

Building on this framework, the seminar focuses on the Turkish garment industry (TGI), to examine how changing global and domestic political economies shape firms’ upgrading prospects. It moves beyond a narrow focus on global value chain governance and sectoral industrial policy to explore misalignments between sectoral interventions and broader economic policies. The article argues that post-pandemic demand conditions, geopolitical shifts, and industrial policy measures could have created opportunities for upgrading. However, macroeconomic instability and rising labour and energy costs undermined firms’ investment capacity and price competitiveness, ultimately limiting their ability to realise these opportunities and constraining their upgrading prospects.