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The practicality of regional import substitution as a strategy for sustainable development in the Caribbean

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  • Alleyne, Antonio
  • Lorde, Troy
  • Moore, Winston

Abstract

It has long been apparent that economic development in the Caribbean could not be sustained on the basis of traditional agricultural exports. Since the 1960s the debate has centered on what should take their place, and what mechanism should be used to achieve, at least in part, sustainable development. One reoccurring topic is the notion of import substitution. Contrary to previous literature, this study evaluates the feasibility of import substitution at the regional rather than at the country level on the basis that it is not economically feasible to supply all the goods that a country may consume on its own. To evaluate the feasibility of this approach, we use a trade database that matches imports (consumption) and exports (production capabilities) of various Caribbean countries. We then conduct counterfactual simulations of the feasibility of import substitution if all of the trade overlaps within the region are exploited. We discuss the implications that this might have for intra-regional trade, economic activity and employment. The overall feasibility of such an approach is also assessed.

Suggested Citation

  • Alleyne, Antonio & Lorde, Troy & Moore, Winston, 2022. "The practicality of regional import substitution as a strategy for sustainable development in the Caribbean," MPRA Paper 113129, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113129
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    References listed on IDEAS

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    6. Puga, Diego & Venables, Anthony J, 1999. "Agglomeration and Economic Development: Import Substitution vs. Trade Liberalisation," Economic Journal, Royal Economic Society, vol. 109(455), pages 292-311, April.
    7. Henry, Merle E., 1981. "Industrial development strategies in Caribbean countries: Jamaica," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 27298, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    More about this item

    Keywords

    trade; import substitution; Caribbean; CARICOM;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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