Outward-Orientation and Development: Are Revisionists Right?

Anne Krueger has been an influential thinker, researcher and policy adviser on economic development and its relationship with openness to international trade, investment and technology flows. Recently, in her presidential address (Krueger, 1997) to the American Economic Association, aptly titled ‘Trade Policy and Development: How We Learn’, she recalled that:

Ideas with regard to trade policy and economic development are among those that have changed radically. Then and now, it was recognized that trade policy was central to the overall design of policies for economic development. But in the early days, there was a broad consensus that trade policy should be based on import substitution … It was thought import substitution in manufactures would be synonymous with industrialization, which in turn was seen as the key to development.