Sara Hsu
 Seeks
to explain how and why countries
develop
 Series of stages or product of factors
 General categories of theories:
 Convergent and nonconvergent, latter
incl:
• theories that emphasize multiple equilibria
• theories of aspiration gaps
• theories of history dependence
• theories of institutions
 China, India
and Japan utilized theories
of marketization and trade liberalization
in different ways
 Used
industrialization theory as
embodied in the theories of Walt
Whitman Rostow and W. Arthur Lewis
 Used as a prime basis for the theory of
Ranis and Fei (1961)
 Used as the prime exception for Moulder
(1977)’s dependency theory
 First
theory to attempt to explain
Japanese development was the “flying
geese” theory
 Akamatsu’s (1962): economic
development took place on a global
scale, with Western Europe as a lead
goose, Japan as a lead goose on a
regional scale
 Seven stages of economic development
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1. Asian countries traded Asian products for Western
European industrial products.
2. occurred when Asian handicrafts industry was destroyed
by increased amounts of Western European manufactured
products entering the area
3. Western European techniques and capital flowed into Asia
to support large scale production of raw materials for export
to Europe, in exchange for consumer goods.
4. Western European capital flowed into Asia to support
production, this time of processed raw materials.
5. Asian domestic capital was used to generate raw
materials. Capital was imported from Western Europe to
produce consumer goods
6. manufactured goods were produced by domestic Asian
industries. Capital goods were imported from Western
Europe.
7. the Asian country was able to export manufactured
consumer products, and to produce some capital goods
itself.
 Laid
out five stages of development
through which each economy must pass:
• the traditional society
• the preconditions for take-off
• the take-off
• the drive to maturity
• the age of high mass-consumption
 Two
sectors: 1) traditional agricultural
sector with disguised unemployment and 2)
capitalist industrial sector that consumes
surplus food produced by agricultural
sector.
 Surplus labor moves from agriculture to
industry
 First phase: labor perfectly elastic
 Second phase: no disguised unemployment;
commercialization of agriculture
 Japan
was exception
 Japan’s development was due to its
ability to shield itself from colonialism
 Other non-Western societies became
colonized by Western powers, stunting
their development
 Incorporated
Marxism and Mao Zedong
Thought
 Marxism: basis for developing society
 Mao Zedong Thought: building of
Communist Party
 “Keeping up appearances” of continuity
 David
Ricardo’s Theory of Comparative
Advantage
 China’s “grand international cycle”
theory: because developed countries
moved away from labor-intensive
production, China should focus on labor
intensive production to support the
upward movement of developed
countries’ economies
 Beijing Consensus
 Prompted
to reform under Neoliberal
Theory by IMF
 Applied selectively and gradually
 Criticized by some for being focused on
growth rather than well-being
 East
Asian Developmental State
 Development
theory has been influenced
by and has influenced development in
Asia.
 Development theories applicable to India
include Neoliberal theory.
 Those applicable to China include Deng
Xiaoping theory, comparative advantage.
 Those applicable to Japan include “flying
geese,” stages of growth, migration
theory.
 Although
currently the Washington
Consensus policies of privatization and
deregulation are less in vogue, from the
1940s to the 1960s, it was generally
accepted that the state would play a large
role in the industrialization process.
 Questions?