IDEAS home Printed from https://ideas.repec.org/p/eab/develo/23196.html
   My bibliography  Save this paper

The Five-Phases of Economic Development and Institutional Evolution in China and Japan

Author

Listed:
  • Masahiko Aoki

    (Asian Development Bank Institute (ADBI))

Abstract

Based on the variable rate of gross domestic product per capita growth and its sources, this paper first identifies five phases of economic development that are common to China, Japan, and Korea : M (Malthusian), G (government-led), K (à la Kuznets), H (human capital based) and PD (post demographic-transition). But there are also marked differences in the onset, duration, and institutional forms of these phases across these economies. In order to understand these differences, this paper explores the agrarian origins of institutions in Qing China and Tokugawa Japan (and briefly ChosŠn Korea) and their path-dependent transformations over those phases. In doing so, the paper employs game-theoretic reasoning and interpretations of divergent institutional evolution between China and Japan, which also clarifies the simplicity of prevailing arguments that identify East Asian developmental and institutional features with authoritarianism, collectivism, kinship-dominance, Confucianism and the like. Finally, the paper examines the relevance of the foregoing developmental discussions to the institutional agendas faced by China and Japan in their respective emergent phase-transitions. In what way can China avoid the “middle income trap†? What institutional shortcomings become evident from the Fukushima catastrophe and how can they be overcome in an aging Japan?

Suggested Citation

  • Masahiko Aoki, 2011. "The Five-Phases of Economic Development and Institutional Evolution in China and Japan," Development Economics Working Papers 23196, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:develo:23196
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/23196
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    2. Ngai, L. Rachel, 2004. "Barriers and the transition to modern growth," Journal of Monetary Economics, Elsevier, vol. 51(7), pages 1353-1383, October.
    3. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
    4. Che, Jiahua & Qian, Yingyi, 1998. "Institutional Environment, Community Government, and Corporate Governance: Understanding China's Township-Village Enterprises," Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(1), pages 1-23, April.
    5. Deakin, S., 2011. "Legal Evolution: Integrating Economic and Systemic Approaches," Working Papers wp424, Centre for Business Research, University of Cambridge.
    6. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    7. Jack A. Goldstone, 2007. "Jack Goldstone on Gregory Clark, A Farewell to Alms: A Brief Economic History of the World," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 8(3), pages 207-225, July.
    8. Deakin Simon, 2011. "Legal Evolution: Integrating Economic and Systemic Approaches," Review of Law & Economics, De Gruyter, vol. 7(3), pages 659-683, December.
    9. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477.
    10. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters,in: Comparative Institutional Analysis, chapter 5, pages 57-58 Edward Elgar Publishing.
    11. Zelin, Madeleine, 2009. "The firm in early Modern China," Journal of Economic Behavior & Organization, Elsevier, vol. 71(3), pages 623-637, September.
    12. Fumitaka Furuoka, 2009. "Looking for a J-shaped development-fertility relationship: Do advances in development really reverse fertility declines?," Economics Bulletin, AccessEcon, vol. 29(4), pages 3067-3074.
    13. Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, January.
    14. David S. Landes, 2006. "Why Europe and the West? Why Not China?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 3-22, Spring.
    15. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    16. Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review, World Bank Group, vol. 12(3), pages 419-455, September.
    17. Masahiko Aoki, 2013. "Institutions as cognitive media between strategic interactions and individual beliefs," Chapters,in: Comparative Institutional Analysis, chapter 17, pages 298-312 Edward Elgar Publishing.
    18. Rosenthal, Jean-Laurent & Wong, R. Bin, 2011. "Before and Beyond Divergence: The Politics of Economic Change in China and Europe," Economics Books, Harvard University Press, number 9780674057913, December.
    19. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    20. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530.
    21. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
    22. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-387, June.
    23. Ho, Jun Seong & Lewis, James B. & Han-Rog, Kang, 2008. "Korean Expansion and Decline from the Seventeenth to the Nineteenth Century: A View Suggested by Adam Smith," The Journal of Economic History, Cambridge University Press, vol. 68(01), pages 244-282, March.
    24. Michael Kremer, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 681-716.
    25. Jing Cao & Mun S. Ho & Dale W. Jorgenson & Ruoen Ren & Linlin Sun & Ximing Yue, 2009. "Industrial And Aggregate Measures Of Productivity Growth In China, 1982-2000," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 485-513, July.
    26. Allen,Robert C., 2009. "The British Industrial Revolution in Global Perspective," Cambridge Books, Cambridge University Press, number 9780521868273, March.
    27. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, January.
    28. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World," Introductory Chapters,in: A Farewell to Alms: A Brief Economic History of the World Princeton University Press.
    29. Masahiko Aoki & Geoffrey Rothwell, 2011. "Organizations under Large Uncertainty: An Analysis of the Fukushima Catastrophe," Discussion Papers 11-001, Stanford Institute for Economic Policy Research.
    30. Fumio Hayashi & Edward C. Prescott, 2008. "The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 573-632, August.
    31. Avner Greif & Guido Tabellini, 2010. "Cultural and Institutional Bifurcation: China and Europe Compared," American Economic Review, American Economic Association, vol. 100(2), pages 135-140, May.
    32. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    33. Hindriks, Frank, 2011. "Making the Social World: The Structure of Human Civilization, John R. Searle, Oxford University Press, 2010, 224 pages," Economics and Philosophy, Cambridge University Press, vol. 27(03), pages 338-346, November.
    34. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Masahiko Aoki, 2013. "Historical sources of institutional trajectories in economic development: China, Japan and Korea compared," Chapters,in: Comparative Institutional Analysis, chapter 22, pages 439-469 Edward Elgar Publishing.
    2. Glawe, Linda & Wagner, Helmut, 2016. "China in the Middle-Income Trap?," MPRA Paper 73336, University Library of Munich, Germany.
    3. Masahiko Aoki & Geoffrey Rothwell, 2013. "A comparative institutional analysis of the Fukushima nuclear disaster: Lessons and policy implications," Chapters,in: Comparative Institutional Analysis, chapter 8, pages 105-132 Edward Elgar Publishing.
    4. repec:spt:admaec:v:8:y:2018:i:2:f:8_2_3 is not listed on IDEAS
    5. Sng, Tuan-Hwee, 2014. "Size and dynastic decline: The principal-agent problem in late imperial China, 1700–1850," Explorations in Economic History, Elsevier, vol. 54(C), pages 107-127.
    6. Linda Glawe & Helmut Wagner, 2016. "The Middle-Income Trap: Definitions, Theories and Countries Concerned—A Literature Survey," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(4), pages 507-538, December.

    More about this item

    Keywords

    phases of economic development; institutional forms; Institution; game-theoretic reasoning; path-dependent;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • N55 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Asia including Middle East
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:develo:23196. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong). General contact details of provider: http://edirc.repec.org/data/eaberau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.