Klä ling, Da id; F icke, Thomas
A icle
Beyond T ade Wa s and Economic Na ionalism – Towa ds
a Coope a i e Global Go e nance
In e economics
Sugges ed Ci a ion: Klä ling, Da id; F icke, Thomas (2025) : Beyond T ade Wa s and Economic
Na ionalism – Towa ds a Coope a i e Global Go e nance, In e economics, ISSN 1613-964X,
Pa adigm Publishing Se ices, Wa saw, Vol. 60, Iss. 5, pp. 261-265,
h ps://doi.o g/10.2478/ie-2025-0051
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ZBW – Leibniz In o ma ion Cen e o Economics 261
Fo um
Da id Klä ling and Thomas F icke*
Beyond T ade Wa s and Economic Na ionalism –
Towa ds a Coope a i e Global Go e nance
Indus ial policy has e u ned o he cen e o global economic deba e. Once dismissed
as ine icien , go e nmen in e en ion is now seen as i al o add essing clima e change,
echnological compe i ion and supply chain ulne abili ies. Ye he ise in uncoo dina ed
na ional s a egies isks uelling new ade con lic s and economic agmen a ion. This
a icle a gues o a coope a i e global amewo k ha allows legi ima e indus ial policies
while limi ing ha m ul p o ec ionism. I iden i ies h ee main policy a eas – na ional secu i y,
indus ial de elopmen and coo dina ion o he ne -ze o ansi ion – and discusses po en ial
p inciples o anspa en , ime-limi ed and pe o mance-based suppo . Es ablishing such
ules could help econcile na ional ambi ions wi h in e na ional coope a ion and p ese e open
ma ke s whe e e hey a e e icien .
© The Au ho (s) 2025. Open Access: This a icle is dis ibu ed unde he
e ms o he C ea i e Commons A ibu ion 4.0 In e na ional License
(h ps://c ea i ecommons.o g/licenses/by/4.0/).
Open Access unding p o ided by ZBW – Leibniz In o ma ion Cen e
o Economics.
* The con en o his pape is based on discussions wi h Jonas Nahm o
Johns Hopkins Uni e si y and o me Senio Economis o Indus ial
S a egy on he Whi e House Council o Economic Ad ise s. I was
also discussed in s ee ing g oups and a he Be lin Summi in June
2025 wi h Nancy Qian, Thiemo Fe ze and Guy Lalanne.
In e economics, 2025, 60(5), 261-265
JEL: F02, F13, O25, Q56
DOI: 10.2478/ie-2025-0051
Da id Klä ling, Fo um New Economy, Be lin, Ge -
many.
Thomas F icke, Fo um New Economy, Be lin, Ge -
many.
The wo ld is cu en ly expe iencing a pe iod o highly
con on a ional policies d i en by na ional in e es s and
p olonged con lic s o e ade and o he o ms o go e n-
men in e en ions. These policies s and in s a k con as
o he o me global pa adigm o ee ma ke s ha o se -
e al decades had been cha ac e ised by ex ensi e a i
cu s and a aboo agains indus ial policies and e ical
go e nmen in e en ion.
While i has eached a new and openly agg essi e di-
mension since he s a o Donald T ump’s second e m
in 2025, he end owa ds go e nmen in e en ions
aimed a p o ec ing na ional in e es s o p omo ing s a-
egically impo an indus ies had eme ged as an in e -
na ional phenomenon long be o e his. This de elopmen
has been unde pinned by economic esea ch iden i ying
he downsides o a s ongly ma ke -d i en globalisa ion:
cos ly ade shock dis up ions, o e dependencies on he
supply o c i ical goods om a limi ed numbe o coun-
ies, he need o suppo nascen indus ies and o os e
he de elopmen o clima e- iendly indus ies.
Gi en he long-s anding end, i s deepe d i e s and new
esea ch emphasising he e ec i eness o indus ial poli-
cies, he cen al ques ion in he u u e will no be how o
e u n o a ee-ma ke wo ld, bu a he how o design
common global ules ha accommoda e na ional indus-
ial policies wi hin a coope a i e amewo k. Such ules
would help a oid a bi a y p o ec ionis in e en ions o
escala ing con lic s in he o m o a i wa s. De ining a
cohe en sys em o coope a i e global go e nance and
clea guidelines o indus ial policies may e en become
he p econdi ion o p ese ing ee ma ke s whe e e
hey a e e icien .
In he cu en con ex o escala ing ade con lic s, hink-
ing abou e o ming he global o de may appea u opian.
Ne e heless, beginning p epa a ions o such go e n-
ance now may help seize u u e oppo uni ies. In his
sense, his pape seeks o iden i y some o he main chal-
lenges ahead in building a new coope a i e go e nance
amewo k.
To de elop such a amewo k, i is c ucial o iden i y which
ypes o go e nmen in e en ions could become b oadly
accep ed and hus be ecognised as legi ima e, whe he
o economic o o he easons, on a consensual basis.
Th ee majo ca ego ies o indus ial policy ha appea o
i his desc ip ion a e he ollowing:
In e economics 2025 | 5
262
Fo um
• Na ional secu i y conce ns in ol e measu es aimed a
de ending na ional so e eign y and educing depend-
encies o s a egically impo an sec o s;
• De elopmen o he indus ial base includes policies
suppo ing he eme gence o new indus ies o acili-
a ing an upg ade wi hin global alue chains;
• Coo dina ion p oblems equi e policies designed o
accele a e he ansi ion o a ne -ze o economy.
Clea ly de ining hese cases will, in u n, allow o a be e
unde s anding o which ins umen s unde which ci cum-
s ances may be ole a ed in a u u e global se ing.
The new case o indus ial policies
Du ing much o he pos -Wo ld Wa II pe iod, indus ial
policies we e widely disca ded as ine icien and ulne -
able o en -seeking. This has p o oundly changed in e-
cen yea s. Indus ial policies oday ha e e en become
a de ining ea u e o he global economy (E ene e al.,
2024). In addi ion, ecen esea ch akes a mo e posi i e
s ance, o e ing a mo e nuanced and con ex ual unde -
s anding o indus ial policy (Juhász e al., 2023; Juhász
& Lane, 2024).
Mul iple p essu es a e accele a ing his pa adigma ic shi
(Allan & Nahm, 2025): geopoli ical compe i ion wi h China,
echnological change demanding coo dina ed public-p i-
a e esponses, supply chain ulne abili ies exposed by
global c ises and ecogni ion ha complex challenges like
clima e ansi ion equi e mo e han jus ma ke solu ions.
Gi en he appa en pe manence o hese challenges,
go e nmen s a e likely o con inue ac i ely shaping eco-
nomic ou comes h ough a ge ed in e en ions.
The key challenge is o es ablish a global amewo k ha
e lec s his new eali y by allowing o na ional s a egic
objec i es while ensu ing a ce ain le el o coo dina ion o
limi begga - hy-neighbou policies. This ask is pa icu-
la ly u gen o Eu ope, gi en he Uni ed S a es’ e ea
om mul ila e al coope a ion and i s imposi ion o a i s
e en on allies. Bu i is also impo an o he global sou h,
whose coun ies canno compe e in (g een) indus ial pol-
icy aces as ad anced economies seek o ca e up global
supply chains and ma ke s.
E e y in e na ional go e nance sys em aces a ade-o
be ween global coo dina ion and na ional so e eign y; in
he end, i is a ques ion o balance. Wha indus ial poli-
cies a e accep able and on wha e ms? How can de el-
oping economies in eg a e in o global supply chains
while e aining policy space? The answe s will de e mine
whe he cu en ends lead owa ds sha ed p ospe i y o
u he economic agmen a ion.
The challenges o con empo a y indus ial policies
In ecen yea s, ad anced economies ha e emb aced
indus ial policies ha hey once c i icised, implemen -
ing la ge-scale subsidies and local con en equi emen s
o secu e supply chains and main ain s a egic con ol.
While his shi was ini ially a esponse o China’s policies,
i complica es engagemen wi h China (and o he s) on ac-
cep able indus ial policy s anda ds: he e y na ions ha
championed ee-ma ke o hodoxy h ough in e na ional
ins i u ions now deploy in e en ionis ools hey p e i-
ously discou aged.
In pa , his ans o ma ion e lec s ha d-lea ned lessons
abou ma ke limi a ions. The 2008 inancial c isis e-
ealed he dange s o excessi e de egula ion, while he
COVID-19 pandemic exposed c i ical supply chain ulne -
abili ies. Geopoli ical ensions highligh ed he s a egic
impo ance o echnological so e eign y, pa icula ly in
semiconduc o s, clean ene gy and ad anced manu ac-
u ing. A new awa eness o s a egic ulne abili ies ig-
ge ed a undamen al e hinking o he s a e’s economic
ole. Al oge he , he pe cei ed bene i s o indus ial poli-
cies appea o be g owing.
A he same ime, he pe cei ed cos s o indus ial poli-
cies seem o be dec easing. The eason is ha some o
he long-s anding c i icisms o indus ial policies, albei
s ill ele an , no longe de e policymake s as hey once
did. Fo example, he decline o compe i ion and business
dynamism in OECD coun ies o e he pas 20 yea s has
mi iga ed he po en ial nega i e consequences o indus-
ial policies. In addi ion, he g een ansi ion and h ea s
o economic secu i y po en ially acili a e he iden i ica-
ion o ele an c i ical sec o s.
The shi owa ds mo e economic in e en ionism has
c ea ed a complex new landscape: economic and secu-
i y conside a ions now inc easingly o e lap. The Uni ed
S a es’ massi e in es men s in semiconduc o manu ac-
u ing h ough he CHIPS Ac and In la ion Reduc ion Ac ,
Eu ope’s G een Deal Indus ial Plan and simila ini ia i es
wo ldwide e lec a g owing consensus ha s a egic in-
dus ies equi e go e nmen suppo o ensu e na ional
compe i i eness and secu i y.
De eloping economies now ace ba ie s o using he
same indus ial s a egies ha Wes e n na ions hem-
sel es deploy. The EU’s success ul WTO challenge o
Indonesia’s nickel expo ban illus a es his asymme y:
ad anced economies pu sue agg essi e economic na-
ZBW – Leibniz In o ma ion Cen e o Economics 263
Fo um
ionalism while cons aining simila e o s by de eloping
na ions. Indonesia’s a emp o equi e domes ic p ocess-
ing o nickel – a classic s a egy o mo ing beyond aw
ma e ial expo s – aced in e na ional legal challenges
despi e being economically sound and de elopmen ally
bene icial. This double s anda d unde sco es he need o
e o m he cu en global economic go e nance sys em.
Building blocks o e ec i e economic go e nance
Key p inciples o sus ainable global indus ial policy in-
clude anspa ency, clea objec i es, non-disc imina ion
and go e nmen suppo ha is bo h ime-limi ed and
pe o mance-linked. These basic elemen s mus be wo-
en in o a mo e comp ehensi e amewo k ha accoun s
o di e se na ional ci cums ances and de elopmen
needs, and a oids begga - hy-neighbou policies wi h
nega i e spillo e s.
E ec i e indus ial policies should in p inciple aim o c e-
a e posi i e-sum ou comes, whe e all pa icipan s gain
om economic ans o ma ion. Well-designed in e en-
ions can expand global p oduc i e capaci y, accele a e
inno a ion and c ea e new oppo uni ies o pa icipa ion
in global alue chains. This app oach ecognises ha in
an in e connec ed global economy, sus ainable compe i-
i e ad an ages come om in e en ions ha inc ease
o e all p oduc i i y a he han shu ou po en ial com-
pe i o s h ough a i ba ie s o poach in es men ac oss
bo de s h ough subsidy aces.
Rega dless o hei de elopmen le el, all coun ies mus
ha e genuine oppo uni ies o pu sue economic upg ad-
ing s a egies. Di e en coun ies equi e di e en ools
and imelines o achie e hei de elopmen objec i es.
Ad anced economies may ocus on coo dina ion chal-
lenges, on ie echnologies and high- alue se ices,
while de eloping coun ies migh p io i ise indus ial ca-
paci y building and skills de elopmen . Socie ies wi h
longe - e m ho izons may a ge esea ch and de elop-
men , while hose wi h sho e - e m p io i ies may ocus
on p oducing ups eam sec o s ha eed domes ic down-
s eam indus ies (Liu, 2019; Liu & Ma, 2023). No na ion
should emain pe manen ly locked in o na ow speciali-
sa ions ha expose hem o ola ile commodi y p ices o
echnological obsolescence. Ins ead, emphasis should
be on join en u es and in es men ha allow p oduc ion
in de eloping coun ies o mo e up he alue chain. Pa -
icula ly in he global sou h, coun ies mus e ain he abil-
i y o di e si y hei economies beyond ex ac i e sec o s
and pa icipa e in highe - alue economic ac i i ies. This is
especially impo an o esou ce-dependen economies
seeking o a oid he “ esou ce cu se” and build mo e e-
silien economic ounda ions.
Global go e nance o indus ial policy should also ex-
end o he se ice sec o . T ade in se ices is inc eas-
ingly i al o global economic in eg a ion and comple-
men s adi ional goods ade and alue chains. Beyond
ou ism and digi al se ices, se ices can enable clima e
ac ion h ough mechanisms such as ecosys em se ices
ma ke s, allowing coun ies o exchange ce i ica es o
ca bon seques a ion o o he en i onmen al bene i s.
Expanding ade o se ices enables economies wi h lim-
i ed goods p oduc ion capaci y o in eg a e in o global
alue chains, bene i om specialisa ion and con ibu e
o sha ed deca bonisa ion goals. Ensu ing anspa ency,
us in da a and obus ins i u ional amewo ks is essen-
ial o deli e global “win–win” ou comes, suppo ing sus-
ainable de elopmen and in e na ional coope a ion.
Go e nmen in e en ions should enhance, a he han
diminish, compe i ion and inno a ion. P o-compe i i e
indus ial policy suppo s eme ging sec o s wi h g ow h
po en ial while a oiding inde ini e p o ec ion o declining
indus ies. Policies should include buil -in mechanisms
o e alua ion, adjus men and emo al, ensu ing public
esou ces gene a e measu able imp o emen s in p oduc-
i i y, employmen and echnological capabili y.
E ec i e indus ial policy also equi es obus ins i u ions
o design, implemen a ion and moni o ing. Despi e he
esu gence o indus ial policy, ew na ions cu en ly pos-
sess such ins i u ions. Go e nmen s mus in es in build-
ing hese capabili ies o p e en esou ce misalloca ion
o policy cap u e. These ins i u ions ensu e ha in e en-
ions do no emain in place a e i ms achie e compe i-
i eness and en o ce sunse clauses when policies ail
o build compe i i e i ms. The cen al challenge is no
picking winne s bu cu ing o suppo o unde pe o m-
ing i ms. Acco dingly, go e nmen assis ance should be
linked o pe o mance a ge s and include p ede e mined
imelines o e alua ion and phase-ou , main aining com-
pe i i e p essu es while p o iding empo a y s a egic
suppo . Benchma king c ea es accoun abili y o bo h
agencies and suppo ed indus ies, wi h emphasis on
eme ging indus ies and echnological ad ancemen s
a he han declining sec o s. The adi ional a ionale –
add essing ma ke ailu es – emains ele an bu equi es
clea exi s a egies o p e en long- e m dis o ions.
A cen al challenge in go e ning he new wa e o indus-
ial policies is c ea ing anspa ency and building an
e idence base o ai sc u iny, policy lea ning and in e -
na ional compa ison. While global epo ing s anda ds
could help cu b ha m ul p ac ices and spillo e s, hei
adop ion depends on c edible incen i es o coun ies o
comply. This equi es in es ing in ins i u ional capaci y
o e alua e policies sys ema ically, lea ning by doing and
In e economics 2025 | 5
264
Fo um
d awing on in e na ional pee exchange. Two p io i ies
s and ou : i s , conduc ing compa a i e e alua ions o
common ins umen s such as esea ch and de elopmen
ax c edi s, enewable subsidies o en u e capi al o un-
de s and wha wo ks in p ac ice; and second, de eloping
cohe en s a egies ha combine complemen a y ools
wi hin obus go e nance amewo ks.
C ea ing a chi ec u e o global coo dina ion
Global coo dina ion is essen ial in an e a whe e na ional
policies inc easingly gene a e in e na ional spillo e s.
While he OECD has begun mapping indus ial policies
(C iscuolo e al., 2022), he e is no dedica ed global o-
um o es ablish anspa ency s anda ds o supply chain
esilience ules. This ins i u ional acuum c ea es isks o
policy con lic s, ine icien duplica ion and exclusion o
de eloping coun ies om eme ging oppo uni ies.
The lack o coo dina ion mechanisms enables se e al
p oblema ic dynamics. Coun ies may pu sue begga -
hy-neighbou policies ha sol e domes ic p oblems by
c ea ing cos s o o he s. Weal hy na ions migh engage
in subsidy aces ha p ima ily bene i hose wi h g ea e
iscal capaci y while c owding ou de eloping coun y
oppo uni ies. Wi hou ag eed s anda ds, legi ima e de-
elopmen s a egies may be challenged as un ai ade
p ac ices. Add essing hese challenges equi es new ap-
p oaches o in e na ional economic go e nance.
Ra he han ying o elimina e all go e nmen in e en-
ion, he ocus should be on es ablishing guidelines ha
dis inguish be ween bene icial and ha m ul policies. This
migh include p o ocols o anspa ency and no i ica ion,
c i e ia o e alua ing policy impac s, and mechanisms
o dialogue when con lic s a ise. De ining pe missible
local con en equi emen s and c ea ing space o de el-
oping economies o pa icipa e in high- alue segmen s
o global supply chains a e c ucial o a oiding a subsidy
wa be ween majo economies ha would ma ginalise
eme ging ma ke s. Local con en policies ha e become
popula ools o ensu ing ha public in es men s gene -
a e domes ic bene i s, bu poo ly designed equi emen s
can educe e iciency and exclude de eloping coun ies.
Coo dina ed guidelines could help balance legi ima e do-
mes ic objec i es wi h in e na ional economic e iciency.
Na iga ing ade-o s
A balance mus be s uck be ween domes ic economic
goals and in e na ional coope a ion, as well as be ween
de elopmen needs and clima e policy. These ensions
e lec deepe challenges in managing in e dependen
sys ems whe e local ac ions ha e global consequences
and whe e mul iple objec i es mus be pu sued simul a-
neously.
The ela ionship be ween de elopmen and en i onmen-
al goals exempli ies hese complexi ies. De eloping
coun ies wo y ha en i onmen al s anda ds migh be-
come new o ms o p o ec ionism ha p e en hei ac-
cess o global ma ke s. Simul aneously, clima e u gency
demands apid indus ial ans o ma ion wo ldwide. The
solu ion equi es designing g een indus ial policies ha
c ea e oppo uni ies a he han ba ie s o de eloping
coun ies, po en ially h ough echnology ans e , capac-
i y building and di e en ia ed s anda ds ha ecognise
a ying na ional ci cums ances.
La ge-scale subsidies in ad anced economies c ea e
challenges o esou ce- ich and esou ce-poo de elop-
ing coun ies alike. Fo esou ce- ich na ions, he chal-
lenge in ol es ensu ing ha na u al weal h ansla es in o
b oade economic de elopmen a he han pe pe ua ing
commodi y dependence. When ad anced economies
subsidise mine al p ocessing and clean ene gy manu-
ac u ing, hey may c owd ou po en ial in es men s in
de eloping coun ies unless accompanied by collabo a-
i e a angemen s. Resou ce-poo de eloping coun ies
ace di e en p essu es as hey compe e o in es men
and ma ke access wi hou he iscal esou ces o ma ch
weal hy coun y subsidies. Thei s a egy mus ocus on
iden i ying compa a i e ad an ages h ough s a egic
in es men s in educa ion, in as uc u e and ins i u ions
ha enable pa icipa ion in global alue chains.
Conclusion
In ecen yea s, a ge ed in e en ion in pa icula sec o s
o he economy has become a p ominen poli ical phe-
nomenon, d i en by c ises in adi ional indus ial egions,
eac ions o China’s mo e agg essi e policies and he u -
gency o ackling clima e change. This has led o a unda-
men al poli ical b eak wi h he o me ma ke -domina ed
pa adigm, ye wi hou a well-de eloped new amewo k.
The g owing numbe o con lic s a ising om his unco-
o dina ed shi owa ds na ionalis indus ial policies e-
lec s he absence o a new se o ules o p e en a bi-
a iness and dispu es. Gi en he high wel a e losses ha
such a acuum may p oduce, i is impe a i e o de elop
guidelines ha could o m he basis o a new global go -
e nance amewo k.
A mo e s uc u ed and p incipled discussion is needed –
one ha dis inguishes be ween bene icial and ha m ul
policies and ensu es ha indus ial policy suppo s a he
han unde mines global economic s abili y. In his con-
ex , i is inc easingly impo an o openly discuss, moni-
ZBW – Leibniz In o ma ion Cen e o Economics 265
Fo um
o and e alua e cu en indus ial policies o iden i y wha
lessons can be lea ned. This e alua ion can help iden i y
cases in which indus ial policies ha e p o en legi ima e
and e ec i e in se ing b oade objec i es, be i clima e
ac ion, na ional so e eign y o he de elopmen o new in-
dus ies equi ing (ini ial) go e nmen suppo .
To da e, discussions o indus ial policy ha e la gely o-
cused on esponding o China’s ini ia i es. This ocus
may impede p oduc i e dialogue: i poli icises deba es
ha ough o be g ounded in economic analysis, c ea es
alse bina ies be ween ma ke and s a e app oaches, and
obscu es he eali y ha all success ul economies com-
bine ma ke mechanisms wi h s a egic go e nmen ac-
ion. Mos impo an ly, i dis ac s om he de elopmen
o uni e sal p inciples ha could guide policy e alua ion
ega dless o na ional o igin.
The ul ima e objec i e is o c ea e a sys em whe e indus-
ial policy se es collec i e p ospe i y a he han na ow
na ionalism. This ision ecognises ha in an in e con-
nec ed wo ld, economic secu i y and de elopmen a e
bes achie ed h ough coope a ion a he han con on a-
ion. Coun ies ha success ully combine domes ic s a-
egic hinking wi h in e na ional collabo a ion will be bes
posi ioned o h i e in he eme ging global economy.
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