ABSTRACT
Import substituting industrialisation (hereafter ISI) was the dominant strategy of industrialisation over the period from the early twentieth century until the late 1970s in a large number of less developed countries (LDCs). However, there was no one single ‘model’ of ISI and it varied over time and place with respect to the role of the state, the role of foreign capital via direct foreign investment (DFI), the variety and type of incentives offered to investors, the sectors accorded priority in investment and the political circumstances reigning at the time. Nevertheless, there are sufficient similarities in the variety of experiences of ISI to allow key characteristics and common problems to be identified and a ‘model’ of ISI to be described. The loss of momentum in, and the not uncommon collapse of, the strategy often in conditions of dramatic economic, social and political turbulence, allow a close examination of the dynamics of the ISI process and the identification of alternative schools of thought that have been advanced to explain the apparent failure of ISI.
