tailieunhanh - Lecture Development economics - Lecture 30: Trade policy in developing countries

Lecture Development economics - Lecture 30: Trade policy in developing countries. This chapter presents the following content: Introduction, import-substituting industrialization, problems of the dual economy, export-oriented industrialization: the east asian miracle. | Trade Policy in Developing Countries Lecture 30 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. How, if at all, is this variation in per capita income related to variation in trade policies? Do protectionist policies cause economic backwardness? Failure of import-substituting industrialization Success of export-oriented industrialization Does economic backwardness require protectionist policies? Economic dualism Introduction Table 10-1: Update See the CIA World Factbook 2004 for recent data on per capita GDP. 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. This argument suggested that trade may be good for rich countries but bad for poor countries. 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 . 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. At that time it was | Trade Policy in Developing Countries Lecture 30 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. How, if at all, is this variation in per capita income related to variation in trade policies? Do protectionist policies cause economic backwardness? Failure of import-substituting industrialization Success of export-oriented industrialization Does economic backwardness require protectionist policies? Economic dualism Introduction Table 10-1: Update See the CIA World Factbook 2004 for recent data on per capita GDP. 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 .