AKA (ISI) or inward oriented strategy

Governments of developing countries that use this strategy are attempting to limit their reliance on foreign goods.  The goal is to develop industry and become less reliant on agriculture.  (Subsidization and protectionism used)

+'s Domestic jobs saved, less reliant on MNC's, protection of culture

-'s Possibly less efficient because of lack of competition, trade wars, doesn't benifit from comparative advantage  

Aims to increase growth by increasing trade.  AD=C+I+G+(X-M) if we improve X we will see growth. Usually the focus is on Manf. Goods

+'s South Korea, Hong Kong, Singapore, Taiwan, and Japan (Asian Tigers)

-'s This is difficult if the country doesn't already have some manufacturing (Barriers make it hard to repeat the Asian Tiger Model)

-       Removal/reduction of Trade Barriers

ie.

-       Tariff barriers

-       Quotas

-       Export subsidies

-       Administrative legislation

-       Help countries produce where they have comparative advantage