ABSTRACT
One issue which comes up time and again in the discussion on economic development is the potential role of international trade. Is foreign trade an engine of growth and development or should countries focus on import sub stitution and production for the domestic market?1 The case of Chile, from the middle of the nineteenth century until the middle of the twentieth century, is a good example of this dilemma. Over the course of those 100 years, the Chilean economy went through two distinct phases: first, a major opening, from roughly 1850 until the depression of the early 1930s, followed by a period, up until 1955, where Chilean development strategy consisted primarily of indust rialization for a protected domestic market.
