Infant Industry Arguments for Assistance to Industries in the Setting of Dynamic Trade Theory

Abstract

The aim of this paper is to survey the protectionist arguments which have been commonly put forward in relation to the economic development of the under-developed countries. I shall begin in Section II with a brief account of the traditional ‘infant industry’ and kindred arguments for protection. In Sections III and IV I shall consider a number of more recent arguments for protection, first on the cost side and next on the demand side of the question, which claim to deal with the broader structural and dynamic problems of economic development of the under-developed countries. In Section V we shall consider some of the difficulties of pursuing an effective protectionist policy in the setting of the present-day under-developed countries, which suggest a conflict, at the practical level, between such a policy and the commonly adopted form of over-all economic development planning involving an all-round restriction of imports.