Imagine that you work for the World Bank and you have been called to Ghana to aid the new president to come up with a new international trade strategy.You are told that the new government is interested in moving away from agriculture and into manufacturing. To do so, the government wants to pursuit a policy of import substitution industrialisation (ISI).You are given a brief about Ghana highlighting the following points:About half of Ghana’s population depends on agriculture, but Ghana still imports some of its food.The majority of Ghana's people live in rural areas and exist on a subsistence way of life.Ghana has one of the highest rates of income inequality in the world.Nearly half of the population is employed in agriculture. QUESTION B.2 Explain import substitution industrialisation and how it can affect Ghana. What role does learning by doing play and when does it make sense for the government to interfere?

Ghana is a developing country, tries to shift from the agriculture sector to the manufacturing…

Answered: Imagine that you work for the World…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter16: Gaining From International Trade

Section: Chapter Questions

Problem 4CQ

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Imagine that you work for the World Bank and you have been called to Ghana to aid the new president to come up with a new international trade strategy.

You are told that the new government is interested in moving away from agriculture and into manufacturing. To do so, the government wants to pursuit a policy of import substitution industrialisation (ISI).

You are given a brief about Ghana highlighting the following points:

About half of Ghana’s population depends on agriculture, but Ghana still imports some of its food.
The majority of Ghana's people live in rural areas and exist on a subsistence way of life.
Ghana has one of the highest rates of income inequality in the world.
Nearly half of the population is employed in agriculture.

QUESTION B.2

Explain import substitution industrialisation and how it can affect Ghana. What role does learning by doing play and when does it make sense for the government to interfere?

Expert Solution