Economic and Policy Lessons from Japan to Developing Countries

Economic and Policy Lessons from Japan to Developing Countries

Economic and Policy Lessons from Japan to Developing Countries Edited by Toshihisa Toyoda Professor at Hiroshima Shudo University Jun Nishikawa Professor Emeritus at Waseda University and Hiroshi Kan Sato Dean of Developing Economies Advanced School (IDEAS)

Introduction, Editorial and selection matter Toshihisa Toyoda, Jun Nishikawa and Hiroshi San-Kato 2012 Softcover reprint of the hardcover 1st edition 2012 ISBN 978-0-230-30206-8 Individual chapters Contributors 2012 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2012 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-33749-1 ISBN 978-0-230-35501-9 (ebook) DOI 10.1057/9780230355019 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10 9 8 7 6 5 4 3 2 1 21 20 19 18 17 16 15 14 13 12 Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne

Contents List of Tables List of Figures Preface Notes on Contributors vii viii ix x Introduction 1 Toshihisa Toyoda, Jun Nishikawa and Hiroshi Kan Sato Part I Economic Development in the Postwar Period 1 Macroeconomic Policy with Particular Reference to Rapid Economic Growth 19 Yasutami Shimomura 2 Industrial and Trade Policy 41 Hiroshi Osada 3 Land and Infrastructure Management 62 Tsuneaki Yoshida 4 Resource Policy and Domestic Origins of Foreign Aid 77 Jin Sato 5 Income Distribution and the Standard of Living 98 Hiroki Nogami Part II Human and Social Development 6 The Japanese Experience and Endogenous Development 119 Hiroshi Kan Sato 7 Rural Development The Role of Rural Livelihood Improvement 134 Masami Mizuno v

vi Contents 8 Educational Development Experience 143 Kazuo Kuroda 9 Public Health Policies and Health Services 159 Atsuko Aoyama Part III Globalization and Its Influence on Development Cooperation 10 Opening of the Economy and Structural Reforms 181 Jun Nishikawa 11 Integration of Global Concerns into ODA 199 Kaoru Hayashi 12 The Evolution of Environmental Policy 217 Hidefumi Imura 13 Disaster Management and Policy 236 Toshihisa Toyoda Part IV New Concerns, New Stakeholders 14 Human Security and the Peace-Building Paradigm: A Japanese Experience and Perspective 255 Yasunobu Sato 15 NGO Experiences 269 Yasuhiro Shigeta Index 289

Tables 2.1 Main economic indicators in the 1960s 44 2.2 Shares and performance of selected manufacturing sectors in the 1960s 46 2.3 Trade liberalization and manufacturing sectors 48 4.1 Titles of the research reports published during 1958 1960 by the RSG 83 4.2 Japanese budget allocation for technical assistance under the Colombo plan during the late 1950s 86 4.3 Trainees from Asian countries from April 1954 to July 1955 86 5.1 Japanese level of GDP per capita and Gini coefficients 99 5.2a Level and composition of social expenditure of central and local government: prewar Japan 106 5.2b Level and composition of social expenditure of central and local government: postwar Japan 106 5.3a Historical health indicators in Japan: GDP per capita and infant mortality rates for Japan and developing countries 108 5.3b Historical health indicators in Japan: height and weight of the Japanese 109 5.4a Historical HDI in prewar Japan 111 5.4b Historical HDI in postwar Japan 112 7.1 Farm household, farm population and farmland in Japan 137 vii

Figures 3.1 Performance of agricultural land reform and rice production 67 3.2 War damage to infrastructure 68 3.3 War damage to industrial capacities 68 3.4 Postwar economic recovery 69 3.5 Cargo traffic trends by mode 70 3.6 Allocation of World Bank loans by sector 72 4.1 Per capita GDP as of 1952 84 4.2 Changing composition of yen-loan 92 4.3 Self-sufficiency and import dependency of energy in Japan 92 13.1 Number of casualties and ratio of stock losses to GNP 237 13.2 Relative shares of the national budget in disaster countermeasures 240 13.3 Estimated indirect losses of the Kobe earthquake 247 14.1 Human security as a nexus of development 256 15.1 NGO project areas 278 15.2 NGO projects in Asia 278 viii

Preface The Japan Society for International Development (JASID) was founded in 1990. Back then, Japan s official development assistance (ODA) had rapidly increased, but Japan had not yet theorized its development cooperation experience. In order to exchange ideas and experiences in development cooperation, the late Dr. Saburo Okita, former Minister of Foreign Affairs, and other people concerned with international development issues, came together in order to establish an academic society comprising academicians, researchers, journalists and practitioners; JASID was the result. It has been 21 years since JASID was founded, and there are now more than 1,800 members. JASID organizes biannual conferences (in spring and autumn), publishes a biannual academic review called Kokusai Kaihatsu Kenkyu (Research in International Development), circulates a quarterly printed newsletter, and maintains a weekly e-newsletter for its members. Between 2004 and 2006, JASID published a collection of five books on international development and Japan s experience in development cooperation. 1 It maintains regular talks with the government administration and development agencies on the subject of Japan s development cooperation policy. On the basis of its substantial achievements in the area of Japan s development cooperation, JASID intended to compile a book in English on Japan s development experience, in order to communicate the ideas of leading Japanese scholars in various fields of international development to interested readers across the world. Japan s experience ought to have many distinct or unique aspects compared with other developed countries; it is our hope that some lessons for developing countries may be drawn from it, particularly in terms of economic and policy aspects. Almost five years have passed since we began compiling this volume. During this period, we have received many helpful suggestions. We thank the anonymous referees who provided some very useful comments on the initial manuscript, which helped with the revisions. Finally, we would like to thank Taiba Batool and the team at Palgrave Macmillan for all their help in bringing this collective work to publication. Note 1. Kokusai Kaihatsu (International Development) Series in five volumes, published by Nihon Hyoron-sha (in Japanese). ix

Contributors Atsuko Aoyama is Professor in the Department of Public Health and Health Systems, Nagoya University School of Medicine, Japan. Previously, she has worked for the World Bank as a health specialist, and for Japanese bilateral assistance programs in over 20 developing countries. Her research interests include health policies and systems, gender and health, and effectiveness of international health assistance. Kaoru Hayashi is Professor of International Cooperation Studies at Bunkyo University, Japan. He has worked for the Overseas Economic Cooperation Fund and the Japan Bank for International Cooperation until 2004 as an aid practitioner and economist. He specializes in the field of management of development and development assistance in general and public management in particular. He is currently a board member of Global Development Network, which is aiming at bridging the gap between development research and development policymaking. Hidefumi Imura is Senior Policy Advisor at the Institute for Global Environmental Strategies and Professor Emeritus at Nagoya University where he taught environmental systems analysis and planning. His main research interests include economic development, industrialization, urbanization and environment in East Asia, particularly focusing on the comparison of Japan and China. Kazuo Kuroda is Professor of Education and International Development at the Graduate School of Asia-Pacific Studies and Dean of the Center for International Studies, Waseda University, Tokyo. His research interests include international education policy and educational development in developing countries. Masami Mizuno is Professor of Rural Development Studies in the Department of International Development Studies, Nihon University Bioresource Sciences (NUBS), Japan. His academic interest lies in socioanthropological studies of agricultural and rural social change in Asia and Africa. Recently he has been working on Japan s rural development experience and its implications for the future of rural areas in Asia. Jun Nishikawa is Professor Emeritus at Waseda University, Tokyo. He was the President of JASID between 2008 and 2011. He specializes in x

Notes on Contributors xi development economics. He has published numerous works on the world economy, development and under-development, human wellbeing and deprivation, the notion of happiness in economics, and postdevelopment issues. Hiroki Nogami is Senior Research Fellow at the Institute of Developing Economies (IDE), JETRO. His main research interests are issues related to social development, such as poverty, inequality and gender, environmental protection, and economic growth in developing countries. Hiroshi Osada is Professor of Economic Development at the Graduate School of International Development (GSID) of Nagoya University, Japan and prior to that he was a researcher at the Institute of Developing Economies (IDE) JETRO. His research focuses on trade and industrial policy for economic development, Free Trade Agreement (FTA), macroeconomic management, and poverty alleviation of developing economies. Jin Sato is Associate Professor of Development Studies at the Institute for Advanced Studies on Asia at the University of Tokyo. He held visiting appointments at Yale (1998 99) and Princeton (2010 11). His research focuses on natural resource governance, foreign aid, and disaster response with a geographical emphasis on Southeast Asia and Japan. He is planning a book on the effects of resource politics on the evolution of state society relations in Asia. Hiroshi Kan Sato is the Dean of Institute of Developing Economies Advanced School (IDEAS) and the President of JASID (2011 2014). He is a development sociologist and has published several books on the intermixture of social and business development, including Fair Trade and base of the pyramid (BOP) business. He has also conducted a study Yemen, especially on social impacts of development aid. Yasunobu Sato is Professor at the University of Tokyo (Graduate Program on Human Security, Graduate School of Arts & Sciences, Director of Research Center for Sustainable Peace, Institute of Advanced Global Studies). He is an attorney at law in Japan and New York, UNHCR Legal Officer and UNTAC Human Rights Officer. His research interests include conflict management, for peace building, and human security and business issues. Yasuhiro Shigeta is Professor of Faculty at the International Studies and Director of the Center for the Multicultural Public Sphere of International Studies at Utsunomiya University. His research mostly

xii Notes on Contributors focuses on international development NGOs in Cambodia, Sri Lanka, the UK and Japan, and public sphere issues in global governance. Yasutami Shimomura is Professor Emeritus at Hosei University, Tokyo. He has had a long professional career at Japan Bank for International Cooperation and Overseas Economic Cooperation Fund of Japan. His research interests include institutional changes in developing countries and the rise of non-western donors. He has published numerous books, including The Role of Governance in Asia and Aid Relationships in Asia. Toshihisa Toyoda is Professor of Economics at Hiroshima Shudo University and Professor Emeritus at Kobe University. He was the President of JASID between 2005 and 2008. His recent research interests include economic development in East Asia Region and policy issues of post-disaster recovery and revitalization. He has published numerous papers in international journals of economics. Tsuneaki Yoshida is Professor Emeritus at the University of Tokyo. His main area of teaching and research is development and infrastructure planning. He led JICA s Cross-Border Transport Studies from 2004 until his retirement in 2010. He co-author and editor of Systems for Infrastructure Development: Japan s Experience.