import substitution

Syllable breakdown

Dictionary meaning

an economic development strategy in which a country seeks to reduce its dependence on imported goods by fostering domestic production of those same goods, typically through protective tariffs, quotas, subsidies, and state investment in strategic industries; import substitution industrialisation was the dominant development paradigm in Latin America, Africa, and parts of Asia from the 1950s through the 1970s, associated with economists including Raúl Prebisch and the UN Economic Commission for Latin America, who argued that developing countries faced structurally unfavourable terms of trade that could only be reversed by building domestic industrial capacity behind protective barriers; the strategy achieved some industrialisation in countries including Brazil, Mexico, and India but was criticised for creating inefficient industries that depended on permanent protection, generating fiscal imbalances through subsidies, and producing goods of inferior quality at higher prices than imports; from the 1980s onward export-oriented development strategies largely displaced import substitution as the dominant development orthodoxy