Written by Eben Macdonald & edited by Tanvi Jhunjhunwala

Apr 7, 2025

The strive to cure global underdevelopment is a monumental governance challenge and the common object of populism in developing countries, often manifesting in a rejection of free trade. The academic foundation of this policy holds that the economic polarisation inherent in the international order can only be alleviated with militant protectionism, a resounding defence of which came from Professor Ha-Joon Chang in 2003 in Kicking Away the Ladder: Development Strategy in Historical Perspective. Here, Professor Chang claims that the ascendancy of the West owed itself to the same exercise, as high tariffs largely shielded industries from foreign competition. I argue that Chang’s shortcoming is that his investigation of history is essentially qualitative: apart from a convincing indication that these measures accompanied economic growth, virtually no quantitative, econometric analysis underpins his study of their causal importance in engendering development.

Populist ideologues around the world are fond of protectionism, and the developing world is no exception, where barriers to free trade and capital mobility are particularly inhibitive. Corroborating disillusionment with the global liberal paradigm, Chang explains that Westerners themselves became rich all thanks to a radically alternative diet of state interventionism aimed at cultivating industrial growth, a key feature of which was protectionism. Instead of allowing the unrestricted flow of goods across borders, Western states committed to actively isolating nascent manufacturing sectors (infant industries) from the vicissitudes of foreign competition, typically in the form of heavy-handed tariffs that subjected imports to onerous taxation. Despite his admission that England benefited from a rapid influx of human capital as war-ravaged Flemish textile workers took refuge there in the 1500s, Chang posits that successive monarchies established a domestic woollen industry. Chang claims they did this by aggressively tariffing imports, creating, in his eyes, the basis for the ensuing industrialisation, though he makes no attempt to causally distinguish the effects of tariffs from the impact of textile expertise. England’s embrace of protectionism continued for centuries, right up until the liberal reforms of 1846, which all but expelled tariffs from the policy forum. While Chang insists that “the free trade regime did not last long,” the truth is that Britain never came close to restoring the same level of protectionism it once had. Tariffs climbed from zero to five percent in 1925, far below the forty-five to fifty-five percent before the reforms. This poses a real inconvenience for Chang because Britain’s status as an industrial powerhouse didn’t recede following trade liberalisation.

Britain is far from the only country Chang considers. Those ranging from the United States to Switzerland, he maintains, owed (in varying degrees) their eventual economic success to protectionist measures, made evident by the growth they exhibited in the presence of high tariffs. This logic constitutes his analysis of a list of interventionist policies, whether subsidies, state ownership of amenities, or the limitation of intellectual property rights, and its shortcomings are obvious. If I managed to complete a marathon while clutching a broken wrist, few would suggest that my ailment helped my efforts, or at least didn’t hinder them. Without such an impediment, I would have been able to complete the run far quicker and at a significantly lower mental and physical cost. Likewise, a consistent finding of research which endeavours towards causal retrospection is that Western economies grew despite protectionism, not because of it. To adequately substantiate his claims about development, Chang would need to surpass the qualitative structure of his book, at a minimum conducting the most bare-bones form of regression analysis by comparing growth between countries over time with reference to their differing tariff levels. Granted, this would still be insufficient, as correlational research methods fail to properly establish causality, but would nonetheless be an improvement over the unambitious framework he uses. The most he does to this end is occasionally cite research produced by other scholars. For instance, he invokes O’Rourke’s data, which show that from 1875 to 1914, tariff stringency was positively correlated to economic growth. Importantly, these results are simply correlational and do exceedingly little, as economist Douglas Irwin points out, to control for the plethora of variables that “confound the inference that high tariffs were responsible for (their) strong economic performance during this period.” In O’Rourke’s case (and indirectly, Chang’s), the magnitude of the contaminating factors is large—the high-tariff, high-growth economies that populate his dataset tended to possess many other coincidental advantages for development, like land abundance, intense capital investment, and labour scarcity, namely in the New World. After all, if I, still with a broken wrist, were to run against my friend in a marathon and yet win, few would lend credit to my physical predicament, especially if I were a professional athlete who’d conducted months of training beforehand or were given a head start in the race. To reliably assess the causal impact of the policies Chang celebrates on historical development, it is imperative to use more advanced quantitative methods, which can elucidate the opportunity costs high-growth economies experienced with protectionism. We must consider two crucial facts about tariffs that are both historically pertinent, as well as in modern-day economics. Firstly, while tariffs might make industries more profitable through restricting price competition, this has a double-edged effect, as many manufacturing firms heavily depend on imports. Raising those costs simply results in lower productivity. These were the exact empirical findings of Klein and Meissner, who (fittingly) assess the impacts of tariffs on the US economy with a model that compares individual states and industries. There are other mechanisms Chang overlooks by which protectionism hindered, not helped, manufacturing sectors. Manufacturing tariffs were popular in many Western states, as were agricultural ones, since farming constituted the economic status quo around the time of the Industrial Revolution. A big reason for the transition away from agriculture, which characterised modern-day development, was that the returns from manufacturing were far greater. A danger of protectionism, however, is that it shrinks the profit advantage industry enjoys by disproportionately shielding farmers from competition, diluting the incentive to redeploy capital towards manufacturing. Research on the effects of France’s 1892 Meline tariff confirms exactly this. Evidence from eighty-five French administrative districts allowed Bignon and Garcia-Penalosa to extrapolate the aggregate effects of protectionism by comparing their degree of exposure to the tariffs, while also controlling for important factors in ways far beyond the reach of Chang’s book, such as religious conservatism, migration patterns, and the structure of land ownership. Although the specific effects on the manufacturing industry were not studied, they find that protectionism took a heavy toll on primary school enrolment in France, as the lack of competitive pressure for technological upgrades (both within agriculture and outside it) eliminated the incentive households had to bestow new, modern skillsets on their children. A study of this kind is especially useful because it observes a nation that switched from a relatively liberal (even “laissez-faire,” in Chang’s words) trading regime to a protectionist one, allowing an evaluation of the causal effect of tariffs on economic growth.

Chang’s discussion of Western industrial history doesn’t just lack quantitative rigour, as he even falls short of producing an acceptable qualitative analysis. In the absence of econometric scrutiny, making the case that interventionist economic policies were responsible for industrialisation—or at least had a major positive influence—requires him to actively discount the visibly liberal aspects of early Western governance strategies and show they weren’t as important as the more statist elements, especially in the most prosperous economies like Britain. Although he cares to mention that intellectual property rights weren’t strong enough to apply to imported goods, Chang overlooks England’s patent system, which had existed as early as 1624, inducing a precocious degree of innovation within its own borders, along with other significant policies, such as the privatisation of monastic land, which enhanced agricultural efficiency. England isn’t the only country he makes this error with. While keen to highlight its commitment to industrial policy and its short-lived attachment to free trade, Chang omits discussion of Sweden’s liberal reforms to institute firm property rights and remove many regulatory obstacles against entrepreneurship. Though admiring of cumbersome tariffs in the United States that lasted for centuries, he astonishingly overlooks a rigourous Constitution that upheld private property rights in the most contentious of cases. Chang’s method of qualitatively reading economic history makes causally evaluating the developmental strength of these policy factors versus the ones he promotes impossible.

Nonetheless, Chang maps his assessment of Western economic history onto contemporary governance questions. Since liberal economic policies cannot account for the West’s success, he asks on what basis we can expect them to orchestrate monumental economic change in poorer countries. Later in the book, he takes this further with an ostensible demonstration that ‘neoliberalism’ has inflicted stagnation upon every region it has befallen, though that disposition is riddled with the same logical cheap shots and empirical shortcomings as the section I have reviewed. Populist insurgencies have their genuine uses in shaping governance changes for the good, but the evidence is far and slim that protectionism serves as an adequate instrument to alleviate the world’s most pressing socioeconomic challenges.