Import substitution industrialization

Import substitution industrialization is a development strategy that builds domestic manufacturing to replace imported goods, often through tariffs, subsidies, and state investment.

Infant industry argument: The argument that emerging industries need temporary protection until they can compete with established foreign producers. It supplies the central justification for shielding new domestic manufacturers from imports.
Raúl Prebisch: An Argentine economist who led the United Nations Economic Commission for Latin America and the Caribbean and developed structuralist ideas. His account of unequal trade relations helped justify industrial development within Latin American economies.
Brazilian industrialization: The expansion of manufacturing in Brazil through successive periods of state-led development and private investment. Brazil used protection and public investment to expand industries including steel, automobiles, and consumer goods.
Export-oriented industrialization: A development strategy that expands manufacturing for sale in international markets. It contrasts with building industry primarily behind protection for domestic sales.
Tariff: A tax imposed on goods as they cross a national border. Tariffs raise the price of competing imports and give local producers room to expand.
Structuralism (economics): An economic approach emphasizing persistent structural differences between economies and their effects on development and trade. Import substitution became a major policy expression of Latin American structuralist analysis.
Mexican Miracle: A period of rapid economic growth and relative stability in Mexico, commonly dated from the 1940s to the early 1970s. Mexico's growth relied in part on protected manufacturing serving a expanding domestic market.
Dutch disease: An economic condition in which a boom in one export sector weakens other tradable industries, often through currency appreciation. Resource booms could undermine protected manufacturers by making exports less competitive and imports cheaper.
Foreign exchange control: Government regulation of access to, or transactions in, foreign currencies. Restricting foreign currency can limit imports and direct scarce funds toward industrial inputs.
Economic Commission for Latin America and the Caribbean: A United Nations regional commission established in 1948 to support economic and social development in Latin America and the Caribbean. Its economists shaped the region's postwar case for industrialization and reduced reliance on primary exports.

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