heavy government involvment on economy?

1. As the proponents of Import Substitution Industrialization point out, every developed country has imposed trade barriers to protect domestic industries:

- Britain did it during the Industrial Revolution
http://www.guardian.co.uk/commentisfree/2008/sep/09/eu.globaleconomy

- the U.S. did it from its very founding
http://en.wikipedia.org/wiki/Tariff_of_1828
http://krugman.blogs.nytimes.com/2009/11/07/us-tariff-history/

- all of the Asian tigers have been doing: first Japan, then South Korea and Taiwan, now China and Vietnam, etc.
http://www.allbusiness.com/government/621102-1.html

So if the costs are high, as economists claim, the benefits must be at least comparable: if it wasn't a net help to development, at least it wasn't a significant drag.


2. For many years economists argued that capital controls were a bad idea. Now they are singing a different tune.
http://krugman.blogs.nytimes.com/2009/03/02/capital-control-memories/
http://www.nber.org/crisis/capital_report.html
That said, the costs of controls over multinational investment are high. Just look at India before and after the economic liberalization
http://en.wikipedia.org/wiki/Economic_liberalisation_in_India#Impact_of_reforms