Import substitution policy: Breaking the limits

Abstract

The study focuses on forming an instrumental approach in the field of import substitution policy as a country development strategy implemented through identifying the main constraints of the situational (sanction-caused) and fundamental (related to the policy content) nature. The research subject is the import substitution policy in Russia, as well as the conditions created by economic sanctions. Methodologically, the study relies on the theories of international trade and public administration that allowed determining the main types of import substitution and restrictions emerging when managing this process at the government level within a large-scale system, as well as establishing feedback in the implementation of macroeconomic policies counteracting import substitution, i.e., parallel imports and zero duties. The research methods are comparative and taxonomic analysis, and generalization of statistical estimates. Empirical evidence comes from the industry-specific import substitution programmes and orders of the Ministry of Industry and Trade of the Russian Federation. The author proposes a pyramid of import substitution significance levels reflecting various scales of import substitution policy – starting from products and services, technologies, and institutions (rules) to regulatory methods and policy models, cultural imperatives, and economic doctrines. The generalized Russia’s experience shows that progress in import substitution is relative. This implies investing more efforts in the development of a national project that would link national design and implementation of sectoral programs at all levels with evidence-based substantiation of resources and priorities within the goals of import substitution.