The return of the visible hand: Social dialogue and the making of 21st-century industrial policy

Industrial policy has returned amid geopolitical rivalry, supply-chain fragility, and contemporary grand transitions, but its performance hinges less on ideology than on governance and design. By examining three comparative cases (Germany, Republic of Korea, South Africa), this paper argues that structured social dialogue improves targeting, monitoring, and legitimacy. The mechanism reduces information asymmetries, aligns incentives via reciprocal accountability, and anchors commitments beyond political cycles, reducing capture and execution risk. For these potentials to be realized several conditions are crucial: institutional permanence; social partners that possess both capacity and legitimacy: and patient and pragmatic engagement by stakeholders.