The idea that greater ‘openness’ would improve the lot of the poor countries is both counter-intuitive and contrary to historical experience. In many cases, the sudden ‘opening’ of a backward economy killed off the little manufacturing activity that existed, thus exacerbating the situation (works by Reinert, 2004b; 2003). From the unification of Italy in the nineteenth century to the integration of Mongolia and Peru in the 1990s, historical experience shows that free trade between nations of very different levels of development tends to destroy the most efficient industries in the least efficient countries (the Vanek-Reinert effect).

In Peru, as in many other Latin American countries, real wages peaked during the period of ‘inefficient’ import substitution. The ports, airports, roads, power stations, schools, hospitals and service industries created by this inefficient industrial sector led by rent-seekers were real and could not have been created without the demand for labour and infrastructure that this sector generated.6

http://www.un.org/esa/desa/papers/2006/wp14_2006.pdf