Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/89154 
Year of Publication: 
2010
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-170
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
This paper studies three horizontal policy instruments and two vertical ones in Chilean industrial policy, particularly regarding small and medium enterprises (SMEs). The horizontal instruments are (1) a guarantee program for borrowing by SMEs (FOGAPE), (2) a small subsidy to new exports that was applied from 1985 through 2003, and (3) the innovation subsidies provided by the Corporación de Fomento de la Producción (CORFO). The vertical policy instruments are the activities of Fundación Chile (FCh), a semi-public entrepreneur cum venture capitalist, and a CORFO program to attract foreign direct investment in information technology. Although most programs are well designed, they are numerous and insufficiently funded; Chile could benefit from a prioritization of needs and consolidation of these programs. Moreover, the instruments for making strategic bets on new sectors are particularly weak. In particular, FCh needs to refocus its activities on high-risk projects with long payoffs, something it cannot do with its small endowment.
Subjects: 
Industrial policy
Small and medium enterprises
Chile
JEL: 
F43
L52
Document Type: 
Working Paper

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