The worst part for me is the death of ambition. The few people i know in manufacturing now limit their ambition to the capture of 200m people, rather than the seven bullion the world has to offer. Because that's the prevailing narrative as told by those that have made it, even though their businesses are suffering from these policies. Thankfully, they don't need much convincing to change their minds. Building the knowhow is the goal and getting them into regional and global supply chains.
Even the philanthropy these firms/their owners do is hardly anything to celebrate because the recipients will pay back through higher prices thanks to the rent-seeking. It is like a loan. The relationship between them and the country is parasitic.
This is an excellent post, Tobi. I really appreciate the work you and Feyi are doing with this and the podcast.
However, I think part of this your post could do with a bit more nuance
For example, you seem to be criticising the idea of infant protection as against infant protection as practised in Nigeria.
This distinction is important.
With very few exceptions, every rich country became so through industrialisation, and one of the important tools of their early industrial phase was infant protection. This is why I think the criticism of the average Nigerian's favourable view of infant protection is unecessary and naive.
As intellectualls, what we should be doing is not to be drawn into the simplistic protection/liberalisation binary, but to highlight the limitation and the folly of our protectionist designs (the FOOD framework does this effectively)
Protection without competition (and the subsequent upgrade in technological and innovation capabilities )is nothing. But these to upgrade these under full liberalisation is also difficult. Contra Kruger, empirical evidence shows that while import substitution hasn't been the best for developing countries in terms of getting their productivity up to the asian tigers, their manufacturing output dropped significant post IS policies
What Nigeria needs is serious discussion about industrial growth, and how to design policies that promotes local competition, incentivises innovation and encourage export participation among our firms
Thank you for reading, and your comments Obiora. I think you missed the point of the section you are referring to. What I argued is that infant industry protection is one of the common arguments usually used to defend rent-seeking, and not just in Nigeria. I did not argue for a protection/liberalisation binary.
But to that point, it brings up an important issue. Infant industry protection argument is a myth that has refused to die since Friedrich List, and it has very thin empirical support since Krueger's landmark paper. However, there's a bigger conceptual problem with the argument - which is that because rich countries did tried to protect infant industry, hence infant industry protection is what makes countries rich. That argument is not only illogical, but an ideological dog whistle being used by people like Ha-Joon Chang to confuse people. Note that I am not speaking of Industrial Policy - which is a basket of different policy instruments that countries have used in the past and still using.
I did not miss the point of that section. In fact, I agree with you that the infant industry argument is frequently deployed, often in bad faith, by Nigerian elites to justify rent-seeking and anti-competitive policies. That critique is entirely valid.
My concern, however, is that your argument goes beyond criticising the misuse of infant protection and instead appears to antagonise the idea itself, treating it as illogical or mythical. This is where I disagree. An idea does not become incoherent simply because it is frequently abused or poorly practised. Nigeria, for example, is democratic in name, but we would not use the practice of democracy in Nigeria as sufficient reason to argue that democracy itself is illogical.
On infant protection itself, I am surprised that you're calling it a “myth” or illogical. That is a strong conclusion which, in my view, is not warranted by the evidence—unless your definition of infant protection differs from the standard one. At its core, infant protection refers to temporary and targeted support and protection intended to help domestic industries build capabilities in the face of stronger external competitors. Understood this way, it is historically accurate that protection has been part of the industrial policy toolkit used by virtually all countries that industrialised successfully. It is therefore unclear to me what, precisely, is illogical about the idea.
Also, I find it funny that you paint Chang as ideological, but uncritically cite Krueger. But the literature has moved substantially since then. Industrial policy is back in vogue, and a growing body of recent work provides more nuanced evidence in support of the infant-industry hypothesis ( Dani Rodrik, for example, has published a few papers recently in this area. In fact, they have a recent review titled "The New Economics of Industrial Policy" where you can see loads of excellent new work moving the argument beyond simplistic IP bad, liberalisation good.)
My point is simple: infant protection is not a bad idea in principle nor is it a myth. There is centuries of economic history supporting its conditional use. So, yes, it works. But, it works only under certain conditions, as with all economic ideas. Protection by itself does not make a country rich. What matters is the accumulation of productive capabilities, learning, and innovation within the industrial sector. Infant protection is useful only to the extent that it facilitates these processes, particularly when it fosters local competition.
Nigeria’s experience reflects this distinction clearly. Our industrial policies and protective measures have largely failed not because infant protection is conceptually flawed, but because they have been implemented without serious attention to technological upgrading or competitive discipline. Instead, protection has too often been used to suppress both local and foreign competition, leaving us to capture the downsides of infant protection without delivering the upside of increased domestic capacity or productivity (as your FOOD framwork shows)
Thanks for your comment Obiora, and I am quite happy to engage. Like I said in my earlier comment that I do not dismiss industrial policy, understood more broadly in the ways that you described. The several policy instruments that make up that bunch evolved over time, so I think arbitrarily inserting infant protection into that is a clever sleight of hand that so-called heterodox economists have been using for a while to mislead. I cite Krueger because that paper specifically measured the effect of "infant industry protection" and not "infant industry protection with other things". That is not out of my unfamiliarity with the literature, in fact of the authors of the Rodrik et al paper you mentioned is a close friend, so I am well caught up on the literature.
As for HJC, it is nothing personal to be honest. In development economics, advocates of Washington Consensus are uncontroversially framed as free market ideologues, but I do not see the same framing of people like HJC. I am merely saying that he is better and understood the same way people read Milton Friedman.
The worst part for me is the death of ambition. The few people i know in manufacturing now limit their ambition to the capture of 200m people, rather than the seven bullion the world has to offer. Because that's the prevailing narrative as told by those that have made it, even though their businesses are suffering from these policies. Thankfully, they don't need much convincing to change their minds. Building the knowhow is the goal and getting them into regional and global supply chains.
Billion* dang it!
Even the philanthropy these firms/their owners do is hardly anything to celebrate because the recipients will pay back through higher prices thanks to the rent-seeking. It is like a loan. The relationship between them and the country is parasitic.
Very parasitic indeed
This is an excellent post, Tobi. I really appreciate the work you and Feyi are doing with this and the podcast.
However, I think part of this your post could do with a bit more nuance
For example, you seem to be criticising the idea of infant protection as against infant protection as practised in Nigeria.
This distinction is important.
With very few exceptions, every rich country became so through industrialisation, and one of the important tools of their early industrial phase was infant protection. This is why I think the criticism of the average Nigerian's favourable view of infant protection is unecessary and naive.
As intellectualls, what we should be doing is not to be drawn into the simplistic protection/liberalisation binary, but to highlight the limitation and the folly of our protectionist designs (the FOOD framework does this effectively)
Protection without competition (and the subsequent upgrade in technological and innovation capabilities )is nothing. But these to upgrade these under full liberalisation is also difficult. Contra Kruger, empirical evidence shows that while import substitution hasn't been the best for developing countries in terms of getting their productivity up to the asian tigers, their manufacturing output dropped significant post IS policies
What Nigeria needs is serious discussion about industrial growth, and how to design policies that promotes local competition, incentivises innovation and encourage export participation among our firms
Thank you for reading, and your comments Obiora. I think you missed the point of the section you are referring to. What I argued is that infant industry protection is one of the common arguments usually used to defend rent-seeking, and not just in Nigeria. I did not argue for a protection/liberalisation binary.
But to that point, it brings up an important issue. Infant industry protection argument is a myth that has refused to die since Friedrich List, and it has very thin empirical support since Krueger's landmark paper. However, there's a bigger conceptual problem with the argument - which is that because rich countries did tried to protect infant industry, hence infant industry protection is what makes countries rich. That argument is not only illogical, but an ideological dog whistle being used by people like Ha-Joon Chang to confuse people. Note that I am not speaking of Industrial Policy - which is a basket of different policy instruments that countries have used in the past and still using.
Thank you, Tobi, for engaging.
I did not miss the point of that section. In fact, I agree with you that the infant industry argument is frequently deployed, often in bad faith, by Nigerian elites to justify rent-seeking and anti-competitive policies. That critique is entirely valid.
My concern, however, is that your argument goes beyond criticising the misuse of infant protection and instead appears to antagonise the idea itself, treating it as illogical or mythical. This is where I disagree. An idea does not become incoherent simply because it is frequently abused or poorly practised. Nigeria, for example, is democratic in name, but we would not use the practice of democracy in Nigeria as sufficient reason to argue that democracy itself is illogical.
On infant protection itself, I am surprised that you're calling it a “myth” or illogical. That is a strong conclusion which, in my view, is not warranted by the evidence—unless your definition of infant protection differs from the standard one. At its core, infant protection refers to temporary and targeted support and protection intended to help domestic industries build capabilities in the face of stronger external competitors. Understood this way, it is historically accurate that protection has been part of the industrial policy toolkit used by virtually all countries that industrialised successfully. It is therefore unclear to me what, precisely, is illogical about the idea.
Also, I find it funny that you paint Chang as ideological, but uncritically cite Krueger. But the literature has moved substantially since then. Industrial policy is back in vogue, and a growing body of recent work provides more nuanced evidence in support of the infant-industry hypothesis ( Dani Rodrik, for example, has published a few papers recently in this area. In fact, they have a recent review titled "The New Economics of Industrial Policy" where you can see loads of excellent new work moving the argument beyond simplistic IP bad, liberalisation good.)
My point is simple: infant protection is not a bad idea in principle nor is it a myth. There is centuries of economic history supporting its conditional use. So, yes, it works. But, it works only under certain conditions, as with all economic ideas. Protection by itself does not make a country rich. What matters is the accumulation of productive capabilities, learning, and innovation within the industrial sector. Infant protection is useful only to the extent that it facilitates these processes, particularly when it fosters local competition.
Nigeria’s experience reflects this distinction clearly. Our industrial policies and protective measures have largely failed not because infant protection is conceptually flawed, but because they have been implemented without serious attention to technological upgrading or competitive discipline. Instead, protection has too often been used to suppress both local and foreign competition, leaving us to capture the downsides of infant protection without delivering the upside of increased domestic capacity or productivity (as your FOOD framwork shows)
Thanks for your comment Obiora, and I am quite happy to engage. Like I said in my earlier comment that I do not dismiss industrial policy, understood more broadly in the ways that you described. The several policy instruments that make up that bunch evolved over time, so I think arbitrarily inserting infant protection into that is a clever sleight of hand that so-called heterodox economists have been using for a while to mislead. I cite Krueger because that paper specifically measured the effect of "infant industry protection" and not "infant industry protection with other things". That is not out of my unfamiliarity with the literature, in fact of the authors of the Rodrik et al paper you mentioned is a close friend, so I am well caught up on the literature.
As for HJC, it is nothing personal to be honest. In development economics, advocates of Washington Consensus are uncontroversially framed as free market ideologues, but I do not see the same framing of people like HJC. I am merely saying that he is better and understood the same way people read Milton Friedman.