Write an essay that compares and contrasts primary-export-led development policies with import-substitution policies

What will be an ideal response?

Primary-export-led development policies are aimed at encouraging the exports of natural comparative advantage primary products. The hope is that these exports will generate substantial linkage effects that will bring about general economic development. Potential problems in this approach include the possibility of a secular deterioration in the country's terms of trade as well as volatility in world prices. Import-substitution policies seek to promote development by encouraging local industrialization behind initially high trade barriers. This is an example of the infant industry argument for protection. In practice, these policies have had dismal records, as trade barriers have imposed incredible distortions on domestic economies.