IS reduces initially the need for foreign exchange but increasing demand for intermediate goods increases the demand for exchange. Tends to increase de facto dependence on imports. The more complete IS the more essential is the remaining imports. The original interventions cause problems that are addressed by other interventions. Special interest are created, which want protection to go on.
Protectionism is difficult to dismantle.
If intermediate or capital goods production is introduced it has to be protected as well, which is undesirable for the consumption goods manufacturers. This tends to conserve existing industrial structure. In EA, most countries started with IS after the war. From the mid-80s almost all of them had abandoned this policy, although elements survive in almost all of them. IS as a strategy has been unsuccessful.