Why do many economists argue for outward orientation and export Essay

Why do many economists argue for outward orientation and export promotion to the industrialization of East Asia - Essay Example According to large proportion of economics, countries that have relied on outward orientation as a strategy for development and industrialization have done better than those countries that in contrary adopted inward orientation (Edwards, 1989, p. 1). More specifically, outward orientation is a trade policy characterized with absence of bias against exports, active promotion of exports and low trade barriers (Mody, 1999, p. 2). Firms face equal incentives to produce for the home as well export markets, same time emerging exporters are given quite high levels of initial market protection. Outward orientation is an absence of bias against exports (Bromley, Mackintosh and Brown, 2004, p. 69). An inward orientation is an attempt to withdraw from the full participation of a country in the world economy. It supports import substitution that is the production of goods at home to be encouraged as it would otherwise to be imported. An outward orientation strategy is an attepmt to participate in international trade by encouraging resource allocation without any price distortions. Outward orientation is thus an application of production according to comparative advantage (Appleyard, Field and Cobb, 2005, p. 427). Economists argue for the outward orientation to industrialize East Asia because it is highly useful strategy to enhance and improve the economic performance of the country.