The Role of the Infant Industry Argument in Emerging Market Trade Policies
The “Glass Dome” of Industrial Policy
The Infant Industry Argument is perhaps the most enduring and controversial doctrine in international trade economics. Formulated in the nascent stages of industrial capitalism by figures such as Alexander Hamilton and refined by Friedrich List, its premise is both elegant and seductive: that developing nations possess potential comparative advantages that are suppressed by the presence of established global incumbents. List famously argued that a developing nation must be allowed to place a “glass dome” of temporary protection over its new industries, shielding them from the harsh winds of international competition until they are strong enough to stand alone.
For emerging market policymakers in 2026, the argument remains central to the debate over developmental strategy. They face a fundamental trade-off: allow free-market forces to dictate the structure of their economy, which often leads to a static comparative advantage in low-value commodities, or intervene to cultivate …
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