ch10 Trade Policy in Developing Countries 克鲁格曼国际经济学第六版英文教学课件.pptVIP

Chapter Organization Introduction Import-Substituting Industrialization Problems of the Dual Economy Export-Oriented Industrialization: The East Asian Miracle Summary Introduction There is a great diversity among the developing countries in terms of their income per capita. Why are some countries so much poorer than others? For about 30 years after World War II trade policies in many developing countries were strongly influenced by the belief that the key to economic development was creation of a strong manufacturing sector. The best way to create a strong manufacturing sector was by protecting domestic manufacturers from international competition. Introduction Import-Substituting Industrialization From World War II until the 1970s many developing countries attempted to accelerate their development by limiting imports of manufactured goods to foster a manufacturing sector serving the domestic market. The most important economic argument for protecting manufacturing industries is the infant industry argument. Import-Substituting Industrialization The Infant Industry Argument It states that developing countries have a potential comparative advantage in manufacturing and they can realize that potential through an initial period of protection. It implies that it is a good idea to use tariffs or import quotas as temporary measures to get industrialization started. Example: The U.S. and Germany had high tariff rates on manufacturing in the 19th century, while Japan had extensive import controls until the 1970s. Import-Substituting Industrialization Problems with the Infant Industry Argument It is not always good to try to move today into the industries that will have a comparative advantage in the future. Example: In the 1980s South Korea became an exporter of automobiles, whereas in the 1960s its capital and skilled labor were still very scarce. Protecting manufacturing does no good unless the protection itself helps make industry competitive. Example: Pakistan and In