Although some theoretical models support the need to protect infant industries, empirical research finds no evidence that such a policy is effective and mainstream economics does not embrace the idea. Empirical research may not be robust, however, and ideology may account for some economists’...

This paper analyzes the effect of policies on the Japanese automobile industry before 1945. Japan achieved import substitution of trucks before World War II. It also exported small size passenger cars then. In the process of the development of automobile industry, the government policies seemed...