The rationalizing and restructuring of industries is an increasingly important phenomenon in all countries of the OECD and in many developing countries as well. This paper examines that phenomenon from a number of different angles. It defines a taxonomy of restructuring in terms of the level at which restructuring takes place (company, sector or economy-wide) and the motivation behind it (defensive or positive). It attempts to identify the market failures that may justify government intervention with the process. The paper then uses this analytical framework to examine why the pressures on governments to intervene have so manifestly intensified in recent times, and to identify types of industries most likely to be the object of such intervention. Finally, the paper provides a selective and comparative overview of the industrial restructuring experiences of six major OECD countries. The juxtaposition of the theoretical arguments for intervention to correct market failures with the descriptive analysis of OECD country experiences, provides both an analytical framework and certain policy implications of relevance in a developing country context.