Describe import substitution (Inward looking) developmental strategy, clearly outlining the differences between the first and second stage. Assess its effectiveness in promoting economic development. Compare inward looking and outward looking strategies and discuss the assertion that the latter is superior.                                              The First Stage of Import Substitution:                  All present day industrial and developing countries protect their manufacturing industries for the domestic markets. While the industrial countries of today rely primarily upon the usage of relatively low …showed first 75 words of 583 total…

…showed last 75 words of 583 total…to high costs.         Due to the scarcity of physical and human capital in developing countries that complete the first stage of import substitution, they tend to be at a disadvantage in the manufacture if highly physical capital intensive intermediate goods and skill intensive producer and consumer durables. By limiting the scope for the exploitation of economies of scale, the relatively small size of their national markets also contributes to high domestic costs in these countries.