Countries such as Korea have based their trade policies on providing temporary protection to their nascent industries. The success of this model has provided some validity to the infant industry argument. However, skeptics argue that these industries fail to mature under this veil of protectionism. This study aims to test this claim by examining the protection given to these infant industries in Less Developed Countries. By examining variables such as Effective Rates of Protection (as a measure of protection) and input per unit of output (as a measure of efficiency) this paper empirically tests and shows that these protected industries have, for the most part, not been able to mature significantly. This paper seeks to explain the causes of the failure of this model in the real world despite its theoretical validity. Finally, it recommends policy actions aimed at balancing consumerís and producerís interests and thereby maximizing social welfare.
|Presenter:||Ishraq Dalton (University at Buffalo, SUNY) -- email@example.com
|Time:||10:30 am (Session II)|