Land Reform and Industrial Policy

Question 1

Washington Consensus

Answer 1

1. Reduce national budget deficits
2. Redirect spending from politically popular areas to neglected fields w high econ returns
3. Reform the tax system
4. Liberalise the financial sector with goal of market determined interest rates
5. Adopt competitive single exchange rate
6. Reduce trade restrictions
7. Abolish barriers to FDI
8. Privatise SOEs
9. Abolish policies that restrict competition
10. Provide secure, affordable property rights

Question 2

Import substitution industrialisation

Answer 2

Industrialising by substituting what was imported

Question 3

Paradox of ISI

Answer 3

Composition of imports changes - import consumer durables and producer goods, while producing consumer goods. Can become unaffordable when demand for imports exceeds the ability to pay for imports

Question 4

Secondary ISI

Answer 4

Manufacture more producer goods and consumer durables locally - exploit backward linkages, MNFs, large national firms