As the resort to import substitution as a tool of economic development has spread, it has generated an increasing volume of critical literature. Of the numerous articles that have appeared, one in The Pakistan Development Review, by Ronald Soligo and Joseph J. Stern is among the more suggestive and venture¬some [1, pp.249-270]. The authors undertake to examine the effects of past protection in Pakistan on the efficiency of investment allocation and so to deter¬mine whether or not protection has saddled the country with highly uneconomic industries. Both their methodology and their results are interesting. With respect to the latter, however, and especially with respect to their interpretation, I have some doubts which it is the purpose of this paper to explore.