What elements must be present for protectionism a la the infant industry argument to improve national welfare? Here’s a brief sketch:

(1) Firms can dynamically improve their productivity through learning-by-doing or economies of scale.

(2) There must be a domestic market failure and the first-best governmental intervention to remedy that failure must be unavailable. (Bhagwati & Ramaswami 1963)

(3) The bureaucracy must be technically competent so as to identify the industries that may benefit from protection as well as the degree and duration of protection that would be optimal. (Krueger 1997)

(4) The bureaucracy must be sufficiently insulated so as to resist capture by special interests. Otherwise, the industry will likely receive protection until it is a senile elder in diapers. (Krugman 1987)

(5) The protection must not merely bring later entrants forward in time, which would actually hurt the pioneering firm (Baldwin 1969).

(6) The gains from protection must not be countered by the potential for immiserizing growth when productivity increases in the protected sector, as described by Johnson (1967).

What other circumstances (market or government) are relevant to the potential for infant industry protection to be good policy?