Import-Substituting Industrialization Why not encourage both import substitution and exports? A tariff that reduces imports also necessarily reduces exports Until the 1970s many developing countries were skeptical about the possibility of exporting manufactured goods In many cases, import-substituting industrialization policies dovetailed naturally with existing political biases Copyright C 2003 Pearson Education, Inc Slide 10-10Copyright © 2003 Pearson Education, Inc. Slide 10-10 • Why not encourage both import substitution and exports? – A tariff that reduces imports also necessarily reduces exports. – Until the 1970s many developing countries were skeptical about the possibility of exporting manufactured goods. – In many cases, import-substituting industrialization policies dovetailed naturally with existing political biases. Import-Substituting Industrialization