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Heeyoung Shin - One of the best experts on this subject based on the ideXlab platform.

  • friedrich list s national political economy and the post war east asian development experiences
    Social Science Research Network, 2012
    Co-Authors: Heeyoung Shin
    Abstract:

    This paper is to trace the historical origin of the idea that the state (government) can and should adopt a series of industrial policies as well as protective measures to nurture domestic Infant industries in order to show how this economic theory sheds new insights into previous debates over the role of East Asian developmental states. Many scholars on the East Asian development experiences have correctly pointed out developmental states’ industrial and trade policies for promoting outward export-led growth. However, least attention was paid to the (historical origin of the) economic theory that justifies this highly unorthodox market intervention by the state. The author claims that the original idea from the history of economic thought is best exemplified by the early 19th century German political economist Friedrich List, and examines how his policy proposals for the Infant Industry Protection have been used by almost all advanced economies since then. This historical investigation of economic thought and actual capitalist economic development process can offer a new angle through which we can critically evaluate some of previous debates over the validity and replicability of the state industrial policies for developing countries nowadays. JEL: B3, B15, O24, O25, O53 Keyword: Friedrich List, Infant Industry Protection, comparative advantage, East Asian development model, developmental state, industrial policy

Andres Rodriguezclare - One of the best experts on this subject based on the ideXlab platform.

  • clusters and comparative advantage implications for industrial policy
    Journal of Development Economics, 2007
    Co-Authors: Andres Rodriguezclare
    Abstract:

    Abstract Cases of industrial agglomeration or “clusters” arise in the presence of Industry-specific and local externalities, also called Marshallian externalities. The standard argument is that such externalities may justify a policy of Infant-Industry Protection to allow and encourage clusters to emerge. In this paper I explore this carefully, and show that different policy implications emerge under a more realistic modeling of clusters. In particular, rather than distorting prices to promote clusters in “advanced sectors” that may exhibit strong clustering possibilities, countries should focus instead on promoting clustering in current sectors, which have revealed to have the strongest comparative advantage. Import substitution is not a proper way to achieve this.

  • clusters and comparative advantage implications for industrial policy
    2005
    Co-Authors: Andres Rodriguezclare
    Abstract:

    Industrial agglomerations or `clusters` arise in the presence of Industry-specific and local externalities, also called Marshallian externalities. The standard argument is that such externalities may justify a policy of Infant-Industry Protection to allow and encourage clusters to emerge. This paper explores that argument and shows that different policy implications emerge under a more realistic modeling of clusters. In particular, rather than distorting prices to promote clusters in `advanced`sectors that may exhibit strong clustering possibilities, countries should focus instead on promoting clustering in current sectors that have demonstrated the strongest comparative advantage. Import substitution is not a proper way to achieve such a goal.

Mehdi Shafaeddin - One of the best experts on this subject based on the ideXlab platform.

  • Does trade openness helps or hinders industrialization
    2006
    Co-Authors: Mehdi Shafaeddin
    Abstract:

    Does Trade Openness Favour or Hinder Industrialization and Development? Mehdi Shafaeddin* A paper prepared for the Intergovernmental Group of Twenty-Four on International Monetary Affairs, to be presented at the Technical Group meeting, Geneva, 16-17 March 2006 Abstract The purpose of this study is to examine whether free trade helps or hinders industrialization and development. The author argues that there is neither a theoretical justification nor historical and empirical evidence to support what he refers to as “trade liberalization hypothesis”(TLH). The theory behind TLH is the doctrine of comparative cost advantage which can not be used as a guide to caching up and achieving dynamic comparative advantage which is a policy-based effort. Almost all successful industrializers went through a long period of selective Infant Industry Protection before subjecting their industries to trade liberalization gradually. The forced trade liberalization imposed on the third world during the colonial era led to their de-industrialization, specialization in primary commodities and underdevelopment. On the basis of empirical study of a sample of developing countries which have undertaken trade liberalization during the last quarter of a century and the case study of Mexico, which has been the champion of liberalization, the author also concludes: that trade liberalization is essential when an Industry reaches a certain level of maturity, provided it is undertaken selectively and gradually; that the way it is recommended by neo-liberals under the label of “Washington Consensus”, however, it is a recipe for destruction of the industries at their early stages of infancy, or development; that if through NAMA negotiations of the Doha Round, developing countries submit to developed countries to accept their proposed Swiss formula, with a low coefficient (10), and binding of their tariff lines at low levels, it would be at the cost of halting their industrialization process; that the low income countries and others at early stages of industrialization, in particular, will be trapped in production and exports of primary commodities, simple processing and at best assembly operation and/or other simple labour intensive industries. Finally, as international trading rules are not conducive to industrialization and development, he argues for the need for a different framework of industrial and trade policies outlined elsewhere**. Such a framework, however, requires a radical change in international trade rules. Developing countries should not be worried, he emphasizes, to be “blamed” for defending their policy autonomy in order to enhance their development. *The author is a development economist, affiliated to the Institute of Economic Research, University of Neuchate. He is the former head of Macroeconomics and Development Policies Branch, Globalization and Development Strategies Division of UNCTAD and the author of Trade Policy at the Crossroads; the Recent Experience of Developing Countries, Macmillan, 2005 as well as a number of articles on trade, industrial and development policies. The author is grateful to Mr A. Buira, the Director of G24 Secretariat, for his comments on an earlier draft. His thanks also go to J. Pizzaro for his helpful assistance in processing data. **Shafaeddin, M. (2005.c) “Towards an Alternative Perspective on Trade and Industrial Policies”, Development and Change, 36.6:1143-1162. Shafaeddin 1

  • how did developed countries industrialize the history of trade and industrial policy the cases of great britain and the usa
    1998
    Co-Authors: Mehdi Shafaeddin
    Abstract:

    This paper examines the history of trade policy in Great Britain and the United States and also refer to the cases of Germany and France. This paper indicates that it is a fallacy that early industrializers could have developed their industrial sector without Infant Industry Protection. Indeed in all cases, to develop their industries, they went through an Infant Industry Protection phase and heavy government intervention in the foreign sector. Nevertheless, the degree of Protection and government intervention varied from one country to another. The United States was the motherland of Infant Industry Protection not only at the intellectual level but also in actual fact. Despite the fact that the Industrial Revolution contributed to the rapid industrialization of Great Britain, its industrial sector benefited from trade Protection and other forms of government intervention in the trade flow through the Navigation Act and by means of political power and even military power.

  • WHAT DID FREDERICK LIST ACTUALLY SAY? SOME CLARIFICATIONS ON THE Infant Industry ARGUMENT
    2026
    Co-Authors: Mehdi Shafaeddin
    Abstract:

    The purpose of this study is to clarify some confusion surrounding the Infant Industry argument presented by Frederick List. Its main contribution is to show that List recommended selective, rather than across-the-board, Protection of Infant industries and that he was against neither international trade nor export expansion. In fact, he emphasizes the importance of trade and envisages free trade as an ultimate aim of all nations; he regards Protection as an instrument for achieving development, massive export expansion and ultimately free trade. List´s theory was a dynamic one, with dimensions of time and geography. Makinga distinction between "universal association" and national interest, he argues that Infant Industry Protection is necessary for countries at early stages of industrialization if some countries "outdistanced others in manufactures". Nevertheless, Protection should be temporary, targeted and not excessive. Domestic competition should in due course be introduced, preceded by planned, gradual and targeted trade liberalization. List guards, however, against premature liberalization. He is aware of the limitation of size for Infant Industry Protection but claims that in most cases this obstacle could be overcome through collaboration with other countries. To List, trade policy is not a panacea; it is an element in his general theory of "productive power" (development); industrial development also requires a host of other socio-economic measures. The Infant Industry argument is not only still valid, if properly applied, but, in fact, it is at present ever more relevant owing to recent technological revolution and changes in the organization of production. But despite this increased need, the means to achieving it have been restricted by international trade rules. The study also refers to significant incidences of targeted Protection of production and exports in advanced countries, while universal and across-the-board liberalization is recommended for developing countries. International trade rules need to be revised to aim at achieving a fair trading system, in which the differential situations of countries at various stages of development are taken into greater consideration. Universal free trade may be easier for developing countries to implement th an a dynamic and targeted trade policy; but "easiness" is not a substitute for "soundness". It is emphasized, however, that, as List maintained, after a point in time trade should be liberalized selectively and gradually, aiming at the ultimate goal of free trade when all nations have reached the same level of development.

Lawrence Edwards - One of the best experts on this subject based on the ideXlab platform.

  • 1 SACU Tariff Policies: Where should they go from here? By
    2015
    Co-Authors: Lawrence Edwards, Robert Z Lawrence
    Abstract:

    This paper characterizes the current SACU tariff structure, considers its rationale, proposes and evaluates some alternatives for reform. While considerable progress was made earlier in liberalizing and simplifying SACU’s tariff structure, over the past few years such movement appears to have halted. This is unfortunate because trade performance is a key constraint in attaining South Africa’s growth objectives. The tariff structure remains excessively complex and opaque and biased against exports. The differentiation provided to different sectors appears mainly to be the result of historical accident and is not justifiable as efficient job preservation, equitable income distribution or on Infant Industry grounds. Some still continue to defend the complex structure as necessary to provide producers of particular products with precisely the amount of Protection they need to become competitive. But their arguments are unconvincing. There may be a case for exceptional temporary safeguards and Infant Industry Protection but a broad complex structure is likely to allocate resources inefficiently: channelling them away fro

  • SACU Tariff Policies: Where should they go from here?” Report prepared for the South African National Treasury as part of the National Treasury/Harvard Growth Project
    2007
    Co-Authors: Lawrence Edwards, Robert Lawrence
    Abstract:

    Abstract: This paper characterizes the current South African Customs Union (SACU) tariff structure, considers its rationale, proposes and evaluates some alternatives for reform. While considerable progress was made earlier in liberalizing and simplifying SACU’s tariff structure, over the past few years such movement appears to have halted. This is unfortunate because trade performance is a key constraint in attaining South Africa’s growth objectives. The tariff structure remains excessively complex and opaque and biased against exports. The differentiation provided to different sectors appears mainly to be the result of historical accident and is not justifiable as efficient job preservation, equitable income distribution or on Infant Industry grounds. Some still continue to defend the complex structure as necessary to provide producers of particular products with precisely the amount of Protection they need to become competitive. But their arguments are unconvincing. There may be a case for exceptional temporary safeguards and Infant Industry Protection but a broad complex structure is likely to allocate resources inefficiently: channelling them away from activities in which South Africa is competitive and towards those in which it is less efficient. Protection of inputs is particularly damaging and distorting of the choices of those seeking to beneficiate and export. In addition, the government simply does not have the requisite information (or instruments) t

Justin Lin - One of the best experts on this subject based on the ideXlab platform.

  • DPR Debate Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A
    2014
    Co-Authors: Debate Between, Justin Lin, Ha-joon Chang
    Abstract:

    This is the first in an occasional series of DPR Debates, designed to illuminate specific issues of international development policy. Each debate will bring together two well-known researchers or practitioners, giving them the opportunity, over three rounds, to test and challenge each other’s ideas. The debates are intended to be robust but accessible, rooted in rigorous research but useful to the wide readership of Development Policy Review. The first debate focuses on the question of whether policies to encourage industrialisation and industrial upgrading should conform to current comparative advantage or aim to miss out steps on the ladder: textiles first or mobile phones? The first position might be thought to be associated with neo-liberal theory which eschews intervention, the second with more structuralist policies which favour government support and extended Infant-Industry Protection. The debate is more subtle than that, however. Both protagonists favour government intervention, but in different ways and for different purposes. The two protagonists are: • Justin Yifu Lin, since June 2008 Chief Economist and Senior Vice-President of the World Bank. Previously for 15 years Professor and Founding Director o

  • Developing World (Random House, 2007).
    2010
    Co-Authors: Debate Between, Justin Lin, Ha-joon Chang, Simon Maxwell
    Abstract:

    This is the first in an occasional series of DPR Debates, designed to illuminate specific issues of international development policy. Each debate will bring together two wellknown researchers or practitioners, giving them the opportunity, over three rounds, to test and challenge each other’s ideas. The debates are intended to be robust but accessible, rooted in rigorous research but useful to the wide readership of Development Policy Review. The first debate focuses on the question of whether policies to encourage industrialisation and industrial upgrading should conform to current comparative advantage or aim to miss out steps on the ladder: textiles first or mobile phones? The first position might be thought to be associated with neo-liberal theory which eschews intervention, the second with more structuralist policies which favour government support and extended Infant-Industry Protection. The debate is more subtle than that, however. Both protagonists favour government intervention, but in different ways and for different purposes. The two protagonists are: • Justin Yifu Lin, since June 2008 Chief Economist and Senior Vice-President of the World Bank. Previously for 15 years Professor and Founding Director o