Open AccessTariff Protection, Import Substitution, and Investment Efficiency: Reply
Author(s) -
Ronald Soligo,
Judith M. Stern
Publication year - 1966
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v6i1pp.110-119
Subject(s) - economics , tariff , investment (military) , industrialisation , substitution (logic) , point (geometry) , affect (linguistics) , work (physics) , macroeconomics , international economics , market economy , law , mechanical engineering , linguistics , philosophy , geometry , mathematics , politics , political science , computer science , programming language , engineering
The essence of Papanek's comments are that the methodology ofour study has biased our results and hence that our conclusions must bequalified. As pointed out by Papanek the issues raised in our paper areof crucial importance to policy and planning decisions in Pakistan andfor this reason much more work needs to be done before one can determinewhat a rational policy for industrial development would be. However, wedo not believe that the issues raised by Papanek would significantlyaffect our results. We do not mean to imply that our results are notopen to substantial qualifications but we do feel that themethodological questions raised by Papanek are not the relevant ones. Inwhat follows we discuss each of the three "adjustments" which Papanekproposes and state why they do not, or may not, alter our results in anysignificant way. Finally, we suggest what we believe to be the moreimportant issues which may affect our conclusions about what thedirection of industrialization should be. Papanek's first "adjustment"relates to the use of output at market prices rather than at factorcost. This issue arises only because we do not have world prices andmust make some assumption about the relationship between domestic pricesand world prices. In this sense, Papanek's [first point is part of histhird "adjustment" regarding our price assumption.