Since the global financial crisis of 2008 there have been over 5 700 increases in tariffs, quotas and administrative controls on international trade - Edexcel - A-Level Economics A - Question 7 - 2017 - Paper 2

To evaluate the effects of protectionism, let's consider the case of a developing country, for instance, India.

Potential Effects of Protectionism

1. Impact on Output and Living Standards: An increase in tariffs may lead to higher prices for imported goods, reducing the purchasing power of consumers, which can negatively affect living standards. Moreover, with reduced competition, local firms may lack the incentive to innovate or improve efficiency, further impacting output negatively.

2. Consumer Prices: Protectionist measures, such as tariffs and quotas, generally lead to higher prices for consumers. Since protectionism limits foreign competition, domestic producers may raise their prices, ultimately affecting household expenditure patterns.

3. Unemployment Levels: While some sectors may benefit from protectionism due to reduced competition, other sectors reliant on imports may suffer, potentially leading to job losses. The overall effect on unemployment will depend on the extent of protection offered to certain industries versus the job losses in others.

4. Economies of Scale: Local firms may experience reduced economies of scale due to limited access to global markets and resources, which can raise their costs and reduce competitiveness.

5. Effect on International Relations and Retaliation: If India adopts protectionist measures, it may lead to retaliation from trading partners, further exacerbating trade tensions and harming the economy.

6. Dependence on Global Markets: The extent of protectionism will also depend on how reliant a developing economy like India's is on international trade. High dependency might result in more significant negative impacts from protectionist policies.

7. Post-Recession Dynamics: Increasing protectionism post-economic downturn could stifle recovery efforts. For instance, failure to attract foreign investment due to restrictive trade policies might slow down economic growth.

8. Justifying Protectionism: Justifications for implementing protectionist measures may include the need to protect nascent industries or safeguard employment in strategic sectors. However, a balanced and evidence-based approach is crucial to avoid long-term economic harm.

In conclusion, while some short-term benefits might arise from increased protectionism, like safeguarding certain jobs, the long-term implications for output, living standards, and international relations could prove detrimental for a developing country like India.