Import-Substituting Industrialization Why didnt import-substituting industrialization work the way it was supposed to? The infant industry argument was not as universally valid as many people assumed Import-substituting industrialization generated High rates of effective protection Inefficient scale of production Higher income inequality and unemployment Copyright C 2003 Pearson Education, Inc Slide 10-13Copyright © 2003 Pearson Education, Inc. Slide 10-13 • Why didn’t import-substituting industrialization work the way it was supposed to? – The infant industry argument was not as universally valid as many people assumed. • Import-substituting industrialization generated: – High rates of effective protection – Inefficient scale of production – Higher income inequality and unemployment Import-Substituting Industrialization