POL201Y1 Lecture Notes - Lecture 6: Import Substitution Industrialization, Import License, Nepotism
Document Summary
Import substitution industrialization; the import substitution strategy of economic development. Isi is one of the four strategies of economic development. The others are: manufacture-export: you manufacture things and you export it. You export secondary goods (goods that are produced in a factory and are manmade): forced-capitalization: (also adopted in ir) you force savings through very low wages for the build-up of capital. This is what most developing countries used at some point in their history: isi: you build up manufacturing enterprises to produce what was previously imported, and you close the border to shut down imports of secondary goods. Theoretically, you now you have domestic market for secondary goods since people will have to buy the products you produce (but what if they already have them? uh oh). You use the closed border as a way of building up your manufacturing base because it doesn"t have to compete with external developers. The first wave of isi was generated by ww1.
