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Import Substitution Industrialization (ISI)

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PPGPortal > Home > Concept Dictionary > I, J > Import Substitution Industrialization (ISI)
Import Substitution Industrialization (ISI) 

A strategy for economic development that centers on the local country’s businesses to produce products that customarily have been purchased from foreign importers.

(Kegley 153)


ISI is an economic development strategy that was pursued by some states in the global south, particularly those in Latin America. This strategy is designed to encourage domestic entrepreneurs to manufacture products traditionally imported from abroad. Governments have been heavily involved in managing their economies and in some cases became the owners and operators of industry. ISI eventually became out of favour, in part because manufacturers often found that they still had to rely on technology and component parts from the global north to produce goods for their domestic markets.

ISI is characterized by state interventions in the economy, and protectionist measures.


Kegley, Charles W. Jr. “World Politics: Trend and Transformation, 11th ed”. Wadsworth Publishing, 2007. Pg 153.



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