Recognition of the benefits of international exchange along with the concern that certain domestic industries and economic agents. Inward oriented and outward oriented trade strategies. We hold the view that the key word in an analysis is process, by which we mean a change in an attitude of mind, whether personal or. Even though economic performance was seen as disappointing by the 1960s, the. Integrating governance and growth brian levy and francis fukuyama. Origins, 1930 to 1950 as noted by carlos diaz alejandro, the great depression still stands as the watershed in the economic history of modem latin america. Isi is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. Foreign direct investment should not be viewed as an instrument for looting the countrys resources. The economic history of latin america since independence, third edition books in the series 1. Tdp 72008 import substitution and export promotion as. Latin american development experienced a turningpoint during the 1930s. Chapter ii strategies for development and transformation.
The model emerged in the depression, and was later codified in unorthodox economic theories. The importance of international trade as a development strategy dates back to the writings in seventeenth and eighteenth century europe, known as the mercantilist ideas. Global trade liberalization and the developing countries. The reasons why import substitution or inward looking development strategy rather than exportoriented development strategy has usually been chosen as an industrialization strategy are. A crosssection study was conducted using data for 21 developing countries. Final report toward an outwardoriented development strategy for small states. Policies to promote developmentin trying to develop, countries can either look inwards or outwards. Defining development development is simply defined as. Basically inward oriented development strategy is an interventionist strategy where government actively intervenes in the market to achieve a set of desirable economic objectives. From the 1930s to the 1980s, economic policies in latin america epitomized the inwardlooking model of development. The economic history of latin america since independence.
In fact, the population of the grassfields possesses the. Indeed, for preferencedependent small states, nothing less than a repositioning of their economies is required. Export promotion, import substitution and economic. There are a variety of motives for starting a partnership, and. As it is stated in above, inward oriented policy is a significant reason why latin america have faced with debt issue. Outward versus inward orientation once again wiley online library.
Recently, and to the surprise of many, even eclacepal not exactly known for its endorse. Interventionist strategies are policies and measures in which government plays an active role in. Both free trade and protectionism have been proffered as prescriptions for third world development but neither has carried universal conviction. Interventionist strategies are policies and measures in which government plays an active role in manipulating markets and allocating resources.
Basically inwardoriented development strategy is an interventionist strategy where government actively intervenes in the market to achieve a set of desirable economic objectives. According to paul streeten, t he outward looking development policies gives rooms for trade liberalization which further facilitate movement of capital, resources, technology and the multinational intervention in the economic activities of the ldc. Despite the regions abundance of natural resources and a favorable ratio. After such policies have been identified through stakeholder dialogues in country settings, sustainable development challenges can be addressed in a more realistic and effective manner. Among economists, the balance has swung in favor of acknowledging the superior growth performance of nations that have opted for outwardoriented development ood, particularly in recent years with the discrediting of importsubstituting industrialization isi, the most visible branch of more inwardoriented strategies bhagwati, 1978. The boserup study and subsequent works in the 1970s focused on the inwardlooking strategies pursued in developing countries, many of which were newly independent nations emerging from colonial rule. In light of the statement above, evaluate the strategies and policies used by the mexican government in order to achieve economic growth and development. Moving from inwardlooking and stateled development strategy. The term primarily refers to 20thcentury development economics policies, although it has been advocated.
Inwardoriented development an alternative strategy for the. Till the 19th century, resourcebased exported development strategy was the dominant feature of all the latin american economies. The size, scope and function of these inward looking strategies of development will be detailed, indicating the essential features for their proper functioning. In his article entitled a cool look at outwardlooking strategies for development the. Outward looking versus inward looking industrialization strategies. Similarly, inward fdi to developing countries was high in the first part of the century due to fdi in railways and then dropped. Ideas and politics of chilean independence, 18081833, simon collier 2.
Openness, outward orientation, trade liberalization, and. Introduction singapore is the smallest state in south east asia. Development strategy, viability, and economic convergence. Inward and outward looking policiesinward lookinginward looking strategies were typical of the general approach to development which dominated thinking after the second world war. The closed economic policy inwardlooking economic policy was introduced in order to accelerate the economic growth and the development as a solution for the economic problems in sri lanka. Liberalisation of trade promotion of free markets supplyside. The china miracle is the result of chinas having chosen the right development strategythat is, pursuing the economys comparative advantage and abandoning the heavyindustryoriented or leapforward development strategy adopted during the pre1979 reform period. For example, early theories and strategies of development were more focused on achieving economic growth as compared to latter theories and strategies that emphasize social, political, ecological and other dimensions of development potter, 2002.
Foreign direct investment and development an historical. What is the difference between inward and outward development. Toward an outwardoriented development strategy for small. Trade barriers are higher than in other developing regions, and while numerous preferential trade agreements have been signed, many of them are intraregional. It builds on previous editions and continues the journey of moving scottish education from being good overall to being great overall. The relationship between the rate of growth of developing countries and the industrialization strategies adopted was evaluated from the 19631985 period. Neither import substitution nor export promotion strategies have come up to expectations. From the latter part of 1950s to 1977 in sri lanka, inwardlooking economic development policies and import substitution industrialization strategy were given priority. Economic freedom of the arab world conference, amman, november 1819, 2014 2.
The size, scope and function of these inwardlooking strategies of development will be detailed, indicating the essential features for their proper functioning. Balancing inwardoriented and outward looking strategies key. Further liberalizationby both industrial and developing countrieswill be needed to realize trades potential as a driving force for economic growth and development. Higher rates of growth were hypothesized to be the result of more open or outwardlooking development policies.
Looking inward for the source of economic growth 51 chapter three many of the stateled investments under import substitution industrialization were in largescale industries such as petrochemicals. Import substitution industrialization looking inward for the. This report explores whether inwardlooking development strategies could be one of the reasons for slow growth in latin america and the caribbean. Interventionist vs free market approaches read the case study on thailand. Dollar 1992 although there are significant numbers of empirical result, which proves that there is a correlation between outward oriented strategy and growth rate, as it is more dependent to external factors and foreign. This strategy was explicitly titled towards forging international trade links on a comprehensive scale. With reference to the government policy towards trade, trade strategies may be broadly divided into two groups, viz. Moving from inwardlooking and stateled development. When the field of development economics started to take shape in the postwar period, the development economists encouraged ldc governments to adopt interventional policies to accelerate capital accumulation and to pursue an inward looking heavyindustryoriented or an importsubstitution strategy that directly aimed. The competition for inward investment among regions and within and between nations is intense, and the promotional agencies concerned are increasingly innovative in their competitive strategies. Nonetheless, one single common thread underlies the differences in development strategies and experiences among the east asian economiesthe role of the.
In the aftermath of the debt crisis of the early 1980s and the ascendancy of the neoliberal paradigm in development economics, developing countries. Among economists, the balance has swung in favor of acknowledging the superior growth performance of nations that have opted for outwardoriented development ood, particularly in recent years with the discrediting of importsubstituting industrialization isi, the most visible branch of more inward oriented strategies bhagwati, 1978. There is widespread agreement among social scientists that development is a multidimensional phenomenon, with economic, political, and social aspects, and that the different dimensions of development. What are the different merits of inward looking strategies. World economy, september 1982, paul streeten attacks a straw. Some countries also take a selective approach using ideas from both inward and outward looking approaches and target some sectors. How trade and aid can help deliver sustainable development. Chapter ii strategies for development and transformation process tracks of implementation of agenda 21 and its consequences as the period for the millennium development goals expires in 2015, the. Import substitution industrialization isi is a trade and economic policy which advocates replacing foreign imports with domestic production.
This book examines the new competition for inward investment. Balancing inwardoriented and outward looking strategies. From the latter part of 1950s to 1977 in sri lanka, inward looking economic development policies and import substitution industrialization strategy were given priority. Inward focus might be relevant in a larger corporation where there is another department or person to take care of external factors, but this might mean the inward looking manager will be barraged by improvement requests or strategies from elsewhere, initiatives a purely inward looking person would not understand. The latter part of the century witnessed an increase in inward fdi but measured as the stock as percentage of gdp it was not as high in 1995 as at the beginning of the 20th century. It has no hinterland nor other natural resources, and yet it is the country which has enjoyed the most remarkable economic growth in the last three decades. The effect on gnp growth in developing countries over time. An inwardlooking strategy is an attempt to withdraw, at least in the short run, from full participation in the world economy.
Greater efforts by industrial countries, and the international community more broadly, are called for to remove the trade barriers facing developing countries, particularly. Download now the competition for inward investment among regions and within and between nations is intense, and the promotional agencies concerned are increasingly innovative in their competitive strategies. Outward looking development policies linkedin slideshare. International trade and development paradigms oxford. Inwardoriented development an alternative strategy for.
Global stagnation since the 2008 financial crisis has triggered various development initiatives, including. Defining development development is simply defined as good. Interaction between international trade and the process of development is a complex one. Singer distinguished outward and inward directed development strategies. Structuralists led by raul prebisch, celso furtado, anibal pinto and h. Moving from inwardlooking and stateled development strategy to world market oriented strategy 19232014 a case study for turkey bahri yilmaz eu jean monnet professor and professor in economics, sabanci university, istanbul paper prepared 9. Until, 1970s many developing countries were sceptical about the possibility of exporting manufactured goods. The author advocates a limited measure of delinking from the world market combined with inwardoriented technology adaptation. Indigenous development initiatives have experienced upsurge in the grasslands. Import substitution and export promotion as development strategies introduction why do some countries develop more than others. Import substitution industrialization looking inward for.
The common terminology of import substitution and export promotion can be misleading. This approach is interventionist and protectionist, and guided policy making in many african and latin american. The boserup study and subsequent works in the 1970s focused on the inward looking strategies pursued in developing countries, many of which were newly independent nations emerging from colonial rule. Others did well during the long period of inwardlooking development when modern industry was. Engendering development strategies and macroeconomic. Import substitution and export promotion as development strategies introduction. Criterion outward looking strategy inward looking strategyproblems production of primary goods orientation according to as bases for outward looking cost disadvantages strategy protectionism and vulnerability due to world inefficiency market developments tot, price narrow domestic markets shocks high share of imports in initiation of new. Moving from inward looking and stateled development strategy to world market oriented strategy 19232014 a case study for turkey bahri yilmaz eu jean monnet professor and professor in economics, sabanci university, istanbul paper prepared 9. The contrast between before and after 1929 may often be exaggerated, but there is little. Policies to promote economic development economics online. What have been the effects of thailands move to a more outward looking strategy.
Import substitution policy versus export led growth strategy. The economic history of latin america since independence third edition the economic history of latin america since independence tells the story of promise unful. Pdf from the latter part of 1950s to 1977 in sri lanka, inwardlooking economic development policies and import substitution industrialization. Except few years in 1960s, inwardlooking economic policies and import substitution industrialization isi strategies were given priority. The author advocates a limited measure of delinking from the world market combined with inward oriented technology adaptation. In abandoning the latin american inward looking development model, mexico seems to wish to copy the state led development strategy of east asia rather than the pure free market model. Therefore, development strategies today are increasingly about finding systemic approaches and logical sequencing to achieve multiple goals at once. In the context of latin american development, the term latin american structuralism refers to the era of import substitution industrialization in many latin american countries from the 1950s until the 1980s. What are the different merits of inward looking strategies and outward strategies of international trade as vehicle of development. Import substitution and export promotion economics. International trade theory and development strategy. In short, an outwardlooking strategy calls for a direct transition from a simple, open trade policy to vigorous promotion of manufactured exports by all.
Outwardlooking versus inwardlooking industrialization. The east asian model of economic development and developing. In this paper, two alternative industrialisation strategies, viz. Do their strategies in regard to international trade have a role to play. Less developed countries ldcs have adopted two alternative strategies for achieving industrialisation viz. Engendering development strategies and macroeconomic policies. This entails increased emphasis on efforts to exploit and create comparative and competitive advantage in the service sectors, including tourism, finance. An outward oriented or outward looking strategy is one in which trade and industrial policies do not discriminate between production for the domestic market and exports, or between purchase of domestic goods and foreign goods. How trade and aid can help deliver sustainable development goals. Nov 11, 2011 criterion outward looking strategy inward looking strategyproblems production of primary goods orientation according to as bases for outward looking cost disadvantages strategy protectionism and vulnerability due to world inefficiency market developments tot, price narrow domestic markets shocks high share of imports in initiation of new. Conversely, the inward looking development policies stressed the need for. Export promotion versus import substitution import substitution.
How to start a partnership although area based partnerships are agreements of institutions of various kinds in a local or regional setting, this is not always how they begin. Openness, outward orientation, trade liberalization and economic performance in ueveloping countries. Community development methods and strategy introduction in the material on the subject, the nature of community development will be found described as a program, a method, a movement, a philosophy, as well as process. Paul streeten professor emeritus at boston university isi import substitution industrialisation inwardlooking strategies.
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