(In DEVELOPING COUNTRIES.) The development of industries as a general development strategy. In the early postwar period and indeed up to the early 1960s many economists considered that industrialization constituted by far the most promising
means by which a poor country could develop . Governments of many developed countries accepted this judgment and proceeded to draw up strategies and plans giving
priority to industrial development. The IMPORT SUBSTITUTION approach was adopted by most countries but some did favour EXPORT PROMOTION. While the results of adopting this strategy have been encouraging for a few countries ( especially those favouring export promotion) the majority of countries have experienced mixed and disappointing results. In fact many have in recent years reversed their policies and given priority to developing agriculture.In some cases the difficulties experienced were the result of devoting too many investible resources into industry and neglecting agriculture which is, of course the dominant sector in developing countries. Other countries found that the costs of industrializing were very hight in the sence that EFFECTIVE RATES OF PROTECTION had to be very large before new domestic industry became competitive with imports.Small,very poor countries found that they had great difficulty in establishing viable industries because their markets to small in relation to the minimum efficient size of plant. Some countries found that their BALANCE OF PAYMENTS situation was not significantly improved.The structure of their imports was changed from final consumer goods to machinery, raw materials and spare parts, but dependency was still very “high”. The distribution of income within some countries actually became more unequal with consequential rapid rural-urban migration, growing urban unemployment and political difficulties.In recent years both economists and governments of developing countries have become more circumspect in their attitude to the apparent benefits of an industrialization strategy. Many DEVELOPMENT STRATEGIES new give priority to agricultural and rural development.