Israel, a tiny country of 7 million people, is one of the most important venture capital markets in the world. Back in early 90s, it was a stagnating economy recovering from hyperinflation. Emerging in mid-90s, a strong VC industry transformed Israel into a high-growth, high-income, innovation-based economy.  The government played a central role in this transformation.

It all started when Yigal Erlich, the chief scientist under the Ministry of Trade and Industry, came...

One of the things that I was impressed by when I came to Boston from Turkey was the entrepreneurial environment, and how venture capital (VC) fueled it.  VC is crucial in fostering entrepreneurship and innovation, yet it typically doesn’t take hold in developing countries. So should the government take action and start its own VC fund? My answer is, no! 

There are multiple reasons why doing so would be problematic.  First and foremost, political connections might p...

Dani Rodrik's teaching forms the basis for how I approach industrial policy - namely that governments should intervene where markets fail, and implement policies that target those failures.  This principle also forms the basis for an issue I have with how he approaches policies to promote economic growth through innovation.