| dc.creator | Lewes, Stephen R. | |
| dc.date | 2011-04-04T14:47:29Z | |
| dc.date | 2011-04-04T14:47:29Z | |
| dc.date | 1972 | |
| dc.date.accessioned | 2012-11-10T12:54:40Z | |
| dc.date.available | 2012-11-10T12:54:40Z | |
| dc.date.issued | 10-11-12 | |
| dc.identifier | Lewes, Stephen R. (1972). The effects of protection on the growth rate and on the need for external assistance. Discussion Paper 140, Nairobi: Institute for Development Studies, University of Nairobi | |
| dc.identifier | http://opendocs.ids.ac.uk/opendocs/handle/123456789/500 | |
| dc.identifier | 318915 | |
| dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/handle/123456789/1854 | |
| dc.description | Host studies of protection in developing countries are concerned
with questions of static losses of real output or inefficient resource
allocation at some point of time. These studies are often criticised as
not relevant to problems of development. This paper incorporates the effects
of protection into the most widely used macro—economic projection model,
the 'two—gap' model of Chenory and Strout, and examines some dynamic implications
of protection.
The adaptation of the two-gap model explicitly allows for two
facts related to protection:
1) The apparent amount of import substitution or foreign
exchange saving, overstates the actual, import saving
if the new industry is protected.
2) The apparent amount of export growth or new foreign
exchango earned, is understated whenever protection
applies only to import substitutes.
Thus, the presence of protection will cause the usual macroeconomic
projection models to understate import demand whenever conventional
definitions of value added are used, if there is emphasis on
import substitution behind protection in the plan period.
The adaptation to the model makes it qui+e clear why oountries
pursuing industrialization by means of protection often run into balance
of payments difficulties; The factor payments generated in import—substituting
industries cxceed the value of foreign exchange saved in the
industry - sometimes by substantial amounts. For countries like Kenya,
Uganda and Tanzania with a high marginal propensity to import, and for
industries &s highly protected as come of the largo establishments in
East Africa, it is quite possible for an investment in import substitution
to produce a deterioration, rather than an improvement, in the balance
of payments.
The paper also explores the implications of protection for the
"requirements" of foreign assistance to sustain a given development
programs The results show that, because protection to industries in fact
results in less balance of payments improvement than it appears to, the
need for foreign assistance will be greater (i.e. the balance of payments
constraint is more severe) the greater is the reliance on protection to
"encourage" growth. | |
| dc.language | en | |
| dc.publisher | Institute for Development Studies, University of Nairobi | |
| dc.relation | Discussion Papers;140 | |
| dc.rights | http://creativecommons.org/licenses/by-nc-nd/3.0/ | |
| dc.rights | Institute for Development Studies, University of Nairobi | |
| dc.subject | Economic Development | |
| dc.subject | Aid | |
| dc.title | The effects of protection on the growth rate and on the need for external assistance | |
| dc.type | Series paper (non-IDS) | |
