1. Sara Hsu

2.  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

3.  China, India and Japan utilized theories of marketization and trade liberalization in different ways

4.  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

5.  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

6.  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.

7.  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

8.  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

9.  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

10.  Incorporated Marxism and Mao Zedong Thought  Marxism: basis for developing society  Mao Zedong Thought: building of Communist Party  “Keeping up appearances” of continuity

11.  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

12.  Prompted to reform under Neoliberal Theory by IMF  Applied selectively and gradually  Criticized by some for being focused on growth rather than well-being

13.  East Asian Developmental State

14.  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.

15.  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.

16.  Questions?