The traditional industrial policy of import substitution:

Question

Quizplus · Accepted Answer

Import substitution strategy involves countries producing goods that were previously imported to promote domestic production, but it has not been successful for most countries in the real world. This is because it assumes that import substitution is a permanent solution to the problem of economic development, which is not the case. The strategy also tends to stagnate innovation, the development of technology, and international competition, which are critical drivers of economic growth. Furthermore, it neglects key factors such as economic globalization, regionalization, and the need for strategic partnerships with other countries. Therefore, the strategy is generally unsuccessful in achieving long-term sustainable development goals.

The Traditional Industrial Policy of Import Substitution