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What are the main reasons for protecting infant industries? Why is it difficult to stop protecting them?

a) To encourage innovation; political resistance
b) To promote competition; economic instability
c) To foster globalization; public support
d) To discourage monopolies; legal challenges

User Shiko
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Final answer:

Protecting infant industries aims to allow them to mature into competitive businesses, but ending that protection is complex due to political resistance and the tendency for industries to rely on subsidies indefinitely.

Step-by-step explanation:

The main reasons for protecting infant industries are to nurture and protect them from foreign competition so they can develop into competitive businesses. This approach has seen success, notably in East Asia, where protectionism allowed industries to grow and become global contenders. However, it is difficult to stop protecting them because often these industries fail to mature and become competitive without subsidies. Moreover, protectionist measures intended to be temporary can become entrenched due to political resistance and the difficulty in transitioning to a market-oriented future.

Implementing protection for infant industries is complex; while the goal is to provide short-term support, the outcome can be very different. Industries can become reliant on this protection, leading to a situation where an industry goes directly from infancy to obsolescence without reaching maturity. As a result, trade protectionism that was supposed to be short-lived may persist indefinitely, creating economic inefficiencies and political challenges when attempting to repeal it.

User Tukusejssirs
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