What is import substitution industrialization (ISI) and how does it relate to protectionism?

Economics Protectionism Questions



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What is import substitution industrialization (ISI) and how does it relate to protectionism?

Import substitution industrialization (ISI) is an economic policy that aims to promote domestic industries by substituting imported goods with domestically produced goods. It involves implementing trade barriers, such as tariffs and quotas, to restrict imports and protect domestic industries from foreign competition. ISI is closely related to protectionism as it seeks to shield domestic industries from foreign competition and promote self-sufficiency by reducing reliance on imports.