ABSTRACT
In the previous chapter, we saw that the initial impulse toward a higher level of development comes with the movement of labour from agriculture toward industrial production, typically achieved via an expanding import substitution sector producing relatively simple, non-durable manufactured goods for the domestic
market. This structural shift in the production process and of labour usage toward import substitution is common to virtually all successful and, unfortunately, to many unsuccessful development experiences, as well. ISI is only the first step along a complex path of structural change that makes further progress possible, but without guaranteeing success. No single strategy is sufficient over time if development is to be sustained. Decision-makers, including those in government, need to be prepared to make changes in the prevailing strategy of development when it no longer can continue to provide the base for continued growth. The marks of good policy-making and of relatively long and stable periods of sustained expansion are the ability to recognize the need for and to quickly and effectively make switches in the prevailing economic strategy.
