Import Substitution Industrialization And The East Asian...

Essay Import Substitution Industrialization and the East Asian Model After the end of the World War II the world faced the challenges of economic and social recovery. The majority of developing countries based their economies on Import Substitution Industrialization (ISI), a state-oriented approach to a trade and economic policy. ISI supports the replacement of import with domestic production in order to reduce foreign dependency. This protectionist policy dominated in developing countries, especially in Latin America and sub-Saharan Africa, during the first 30 years after the World War II. By 1980s, when the main gains of ISI were exhausted and it demonstrated its inefficiency, the countries of East Asia adopted a new development strategy. Consequently, this new export-oriented and market-friendly strategy, the so-called East Asian model, has determined the successful economic and trade policy of East Asian countries during the next several decades. To understand the reasons of the shift from ISI to the East Asian model, it is necessary to carefully examine and contrast these two approaches and their supporting theories. The theoretical basis of ISI is represented by structuralism that justifies a state-concentrated development strategies. Structuralists base their theory on the premise that market of the developing countries does not work efficiently and, therefore, states have rights to promote and control manufacturing industries. The foundation of structuralists’Show MoreRelatedImport Substitution Industrialization And East Asian Model1354 Words   |  6 Pages Essay Import Substitution Industrialization and East Asian Model After the end of the World War II the world faced the challenges of economic and social recovery. The majority of developing countries based their economies on Import Substitution Industrialization (ISI), the state-oriented approach to a trade and economic policy. ISI supports the replacement of import with domestic production in order to reduce foreign dependency. This protectionist policy dominated in developing countries, especiallyRead MoreThe Growth And Rapid Growth Of East Asian Economies2202 Words   |  9 PagesThe resilience and rapid-growth of East Asian economies even in the face of rising protectionism in their major export markets and a global recession, has intrigued developmental specialists who see Latin America as a prime candidate for comparison. By becoming increasingly libertarian and by embracing neo-liberalism Latin American countries have sought to emulate the success of East Asian economies. 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