Import substitution : general theoretical aspects and selected Maltese case studies

Abstract

Import substitution, particularly as a strategy of industrialization and development, is a complex subject involving considerations of a conflicting nature. To consider and assess the effects of certain local import substituting industries, it would therefore be useful initially to outline the principal theoretical and other implications underlying import substitution. The need for such an exercise is further underlined by the apparently misleading simplicity prompted by any definition of import substitution which however worded merely envisages the replacement of imported goods by domestic production. Michael P. Todaro says that import substitution "entails an attempt to replace commodities, usually manufactured goods and formerly imported by domestic sources of production and supply". Another author refers to it as "the production of consumer goods in substitution for imports."