Oatley Chapter 6: Trade and Development I: Import Substitution Industrialization

Monoexporters

Their exports were almost fully accounted for by one product.

Enclave Agriculture

Export-oriented agricultural sectors that had few linkages to other parts of the local economy.

Protectionism

Reflected the interests of the politically influential import-competing manufacturing sector, it did not represent a coherent economic development strategy.

Structuralism

The shift of resources from agriculture to manufacturing would not occur unless the state adopted policies to bring it about.

Two coordination problems that would limit investment in manufacturing industries

Complementary Demand and Pecuniary External Economies

Complementary Demand

Arose in the initial transformation from an economy based largely on subsistence agriculture to a manufacturing economy.

Pecuniary External Economies

Arose from interdependencies among market processes.

Big Push

The state would engage in economic planning and either make necessary investments itself or help coordinate the investments of private economic actors.

Singer-Prebisch Theory

Participation in the GATT-based trade system would actually make it harder for developing countries to industrialize by depriving them of critical resources.

Terms of Trade

Relate the price of a country's exports to the price of its imports.

Import Substitution Industrialization

Countries would industrialize by substituting domestically produced goods for manufactured items they had previously imported.

Easy ISI

Focused on developing domestic manufacturing of relatively simple consumer goods, such as soda, beer, apparel, shoes, and furniture.

Export Substitution Strategy

The labor-intensive manufactured goods industries developed in easy ISI begin to export rather than continue to produce exclusively for the domestic market.

Secondary ISI

Emphasis shifts from the manufacture of simple consumer goods to consumer durable goods, intermediate inputs, and the capital goods needed to produce consumer durables.

Backward Linkages

Arise when the production of one good, such as a car, increases demand in industries that supply components for that good.

United Nations Conference on Trade and Development (UNCTAD)

The UNCTAD was established as a body dedicated to promoting the interests of developing countries in the world trade system.

Group of 77

The leading force in the campaign for systemic reform.

GATT Part IV

Part IV called upon core countries to improve market access for commodity exporters, to refrain from raising barriers to the import of products of special interest to the developing world, and to engage in "joint action to promote trade and development".

Generalized System of Preferences (GSP)

Under which manufactured exports from developing countries gained preferential access to advanced industrialized countries' markets.

New International Economic Order (NIEO)

Represented an attempt to create an international trade system whose operation would promote development.