# Economic Isolation Effects

## Definition

The economic consequences of being separated from major markets and trade routes, including limited specialisation, subsistence-level production, and lack of technological or organisational innovation. Economic isolation effects perpetuate underdevelopment and prevent the benefits of division of labour.

## Source Chapter

Book I, Chapter 3

## Context

Smith describes how the inland parts of Africa and northern Asia remain in "the same barbarous and uncivilized state" due to isolation from maritime commerce and extensive inland navigation, demonstrating the severe economic isolation effects of poor market access.

## Economic Domain

General Theory

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