Theory and Practice of Commercial Policy: 1945-1990

In this paper, the evolution of thought regarding protectionist trade policies in developed and in developing countries is examined and contrasted. In the developing countries distrust of markets and a belief in the infant industry argument led to highly protectionist trade regimes. The consequences were so negative that thinking about interventions has changed markedly. The lessons from this experience for the policy implications of the "new trade theory" are then examined.