Debates on protectionism and openness

Abstract

During the last decade, Costa Rica has gradually abandoned its protectionist strategy of import substitution, which creates artificial incentives for productive activity to be oriented towards the domestic market, and has sought to take better advantage of the opportunities that the world market offers it. The discussion about this change in strategy began years ago. The arguments for and against were already well defined when an excellent debate took place between economists and businessmen on both sides, collected in "The Costa Rican Economic Model" (ANFE, 1980). By then, evidence had accumulated rapidly that countries with more open and less distorted economies show faster growth, more stability, and better performance on social indicators. This evidence is today the material of rigor in lessons on economic development in all parts of the world.