A Model Evaluation Framework for Industrial Policy in Canada 

Most of the recommendations apply more broadly than industrial policy:

The author recommends that governments:

1. Show leadership from senior decision-makers, with an explicit commitment at the highest possible level to evaluate industrial policy, backed by sufficient resources.
2. Incentivize industrial policy evaluation by elevating its status in budget and funding decisions.
3. Create a dedicated, centralized industrial policy evaluation unit, resourced over and above the budgets of existing departmental/ministerial evaluation units.
4. Spell out clear guidelines for evaluation of industrial policy through mechanisms such as a Cabinet Directive, and mandate the publication of all evaluations.
5. Develop an industrial policy evaluation schedule that is synchronized with key funding decisions, such as budget cycles.
6. Devise a system of fast-track evaluations for industrial policy decisions to provide sufficient insights to inform evidence-based decision-making;
7. Develop a general logic model template to help frame industrial policy evaluations and translate outcomes and impacts into measurable performance indicators.
8. Adopt a consistent approach to industrial policy evaluation reporting and dissemination to allow for comparison across policies, including tax expenditures.
9. Invest in advanced digital technologies, such as big data analytics, artificial intelligence and machine learning, to improve the design of industrial policies and lower the cost of evaluations.

The renewed interest in Canadian industrial policy should be accompanied by a renewed focus on sound evaluation practices. Governments need to break the cycle of disinterest in evaluation, given the scale of industrial policies and the risks involved. Robust evaluation practices are critical to the successful use of industrial policy to address Canada’s most pressing challenges.

Douglas Nevison is an economist and a former senior public servant at Environment and Climate Change Canada, the European Bank for Reconstruction and Development, the Privy Council Office and the Department of Finance Canada. Throughout his career, he has been a strong advocate for policy and program evaluation and evidence-informed decision-making.

Source: A Model Evaluation Framework for Industrial Policy in Canada