I'm skeptical that such a model would be supported empirically, but I wouldn't be shocked if well-intentioned policy makers had some version of that model in mind (formal or not, consciously or not) when choosing to enact the subsidies.

Third guess, I could imagine a model where the advantage of being the "top" industry has such a large prestige benefit in attracting talent and capital that it might even be economically beneficial to keep pouring money into your winner to keep it on top.

... relatively cheap in comparison to trying to build such an industry from scratch or get back on top when fallen behind, so these subsidies have broad popular support, despite being economically inefficient.

My second guess, and I think this is a weaker explanation, is that there is a "prestige" benefit to having the "winning team." It feels good to the people of a country to have an industry that dominates the world, subsidies from the government to maintain that dominant position are ...

... so the marginal cost to any politician of directing subsidies to that industry are low, and the marginal benefits to that politician (from campaign contributions, alliance with influential industry, etc) are high.

For the industry, the lobbying costs are low, the return from subsidies are high.

Second, given that it's a dumb use of resources, why do countries engage in it?

My first guess would be a Public Choice Theory explanation - an already successful industry has the resources to lobby for subsidies, a developed country has a lot of subsidies they can give ...

... but surely the marginal dollar spent on Industrial Policy for an industry that has already won a) would get a better return basically anywhere else, and b) wouldn't be invested in more productivity, but passed through directly to shareholders?

Am I missing something?

... an industry that's already won?

It's already going to be on the frontier of technology, it will already have accumulated the physical and human capital it needs, it's already benefitting from attracting investment.

I haven't worked this out formally (and suspect someone else already has) ...

... market figure out which industry your country has a comparative advantage in.

The classic question of "Did South Korea achieve huge economic success because or in spite of its Industrial policy?"

But if you're already a wealthy, developed country, why would you pour resources into ...

... and so a developing country, lacking in private capital, might try to jumpstart that process.

The caveat being it's very hard to know in advance which industry is going to be a "winner," and since any industrial policy will hurt all your other industries, it might be better to just let the ...

First, this seems like a dumb use of resources.

I get the argument for Industrial Policy for a developing country trying to nurture an infant industry.

Higher-productivity industries require concentrations of skill/capital that can be hard to start up...

I'm skimming it now instead of doing the writing I should be doing, but here's my initial set of thoughts and questions.

Main takeaway: Rich countries do IP by subsidizing industries they already have a comparative advantage in.

Non-paywalled version:
alexwellerstein.com/publications...

Speaking on Squirrel Hill specifically:

Basically nada has been permitted or built since Summerset.

The Irish Center was the next big one - but we all saw how that turned out.

Squirrel Hill is zoned extremely exclusively. Basically impossible to build anything there these days.

I just emailed it to you.
Feel free to reach out if you have any questions!

Yes, please do! Our most recent data isn't on the public GitHub yet - I did some significant cleaning over December/January that isn't there.

quoteinvestigator.com/2011/10/10/s...

The spoons vs shovels story dats back to 1901.