Is industrial policy back in fashion? Text-as-data evidence from UK policy documents

Abstract

This article evaluates the claim that industrial policy is seeing a revival in developed economies, using text-as-data evidence from UK government policy papers. Structural topic modeling shows that content which can be related to industrial policy has indeed seen a large increase in prevalence over the past decade compared to the baseline of the post-1980 liberal era. Moreover, such content is shown to be increasingly central to post-2010 economic policy based on its position in the network of topics, on the number of downloads of documents associated with it, and on inclusion in important papers. An automated text summarization algorithm is used to extract the fragments which are most representative for these developments, and these are shown to closely match common definitions of industrial policy. A sentiment analysis algorithm is then used to extract the motivations given for policy proposals in representative documents, and indicates that declining economic competitiveness is a central concern.