Economic and Policy Lessons from Japan to Developing Countries

This book assembles original papers on Japan’s experiences of development — with special reference to the period after the Second World War, and with a view to deriving some lessons for developing countries — written by 15 leading academicians of the Japan Society for International Development (JASID). The Society does not specialize in some narrow discipline, but, rather, is very interdisciplinary in nature. This book comprises 15 topics, as selected by the editors. We selected these 15 topics based upon two tentative principles: one is that they are more or less representative of the topics covered by the Society, and the other is that they may be of interest to readers from overseas. We think that some aspects of Japan’s development discussed in this volume have already been addressed in various books and papers, but some aspects have not, as yet. Although we cover some well-known, basic, historical facts and debates concerning the development process, we do believe readers will discover some new ideas and findings.

The purpose of this chapter is to consider the macroeconomic policy of modern Japan, focusing attention on the postwar era, particularly the reconstruction period (1945–1955) and the rapid growth period (1956–1972). The prewar experience is also reviewed as it led to the initial conditions of the postwar era. Dealing with postwar Japan, this chapter highlights the interaction between three major economic theories, namely economic liberalism, Keynesianism, and Marxism.

It was once popular to attribute Japan’s rapid economic growth in the 1960s to the contribution of the industrial policy adopted by the government, especially by MITI. ‘Industrial policy’ in this paper, therefore, refers to a set of economic policies mainly targeted at specific industries and implemented in the late 1950s and 1960s.¹ The purpose of this paper is, firstly, to reassess the effectiveness of industrial policy under the trade liberalization of the period, and, secondly, to draw some policy implications for contemporary developing countries.

This chapter will mainly focus upon Japan’s experiences in land and infrastructure management during the postwar period until the late 1960s, when Japan entered a phase of so-called accelerated economic growth. The experiences of this period can offer several key lessons for contemporary developing countries. From 1945 to 1952, Japan was occupied by the Allied forces for peace-building after the destruction of both physical productive assets and the peoples’ cultural value systems. From 1952 to 1966 Japan received massive amounts of aid from the World Bank and other foreign communities. Most of this foreign aid was used for the improvement of land and infrastructure, which has a lot of valuable implications for contemporary developing countries. With regard to land management, this chapter will only discuss agricultural land reform, and not land use management in urban areas. With regard to infrastructure, this chapter mainly discusses public investment performance and institutional arrangements for infrastructure management in the process of Japan’s recovery period from 1945 to around 1970.

For those in the development business in Japan, Saburo Okita¹ is recognized as a leading thinker and practitioner in international development. Appointed as the first chief of the International Cooperation Section of the Economic Planning Agency in 1955, soon after Japan recovered its status in postwar international society, he went on to become the president of the Overseas Economic Cooperation Fund in 1973 (now the Japan Bank for International Cooperation), Minister of Foreign Affairs (1980–1982), and served as the founding president of the Japan Society for International Development in 1990. In addition to his outstanding foreign services, he was actively engaged in international forums such as the Club of Rome and the Bruntland Commission.

This chapter aims to review the history of the evolution of distribution of income, its redistribution, and social policies in Japan, with specific attention to their impact on the standard of living and poverty alleviation. Japan has been viewed as both an example of sustained economic growth and a leap forward in terms of human development. For example, the United Nations Development Programme’s Human Development Report 1996 (UNDP 1996, Box 2.3, p. 53) refers to the case of Japan as one in which dual success in terms of growth and human development was realized through a commitment to equity in opportunities. According to the report, the base for egalitarian development was built in the postwar period, when radical reforms were introduced to transform Japan into a more democratic society, and the major achievement in human development in the early stages of development reinforced the egalitarian growth of the postwar period. However, since the 1990s, many authors have focused on the increase in inequality in Japan (for example, Tachibanaki 1998, 2004, and 2006). Thus, in order to examine the statement of the Human Development Report 1996, this paper reviews the history of the evolution of income distribution, income redistribution, and social policies not only in the postwar period but also in the prewar period, while also considering the extent to which these policies influenced the standard of living.

When the Japanese experience is addressed in the context of development studies, there is an assumption that the lessons that the country has learned are, in certain respects, applicable to the policies and strategies of today’s developing countries. Almost all of the chapters in this volume are premised on this assumption.

In this chapter, we analyze Japan’s rural development post-World War II in order to draw inferences relevant to the development of the agricultural and rural sectors in developing countries. In the period under consideration, one of the outstanding features of Japan’s rural policy was strong state intervention in the agricultural sector in order to increase food production; it was assumed that increased farm production would improve farmers’ standards of living and eventually facilitate the eradication of rural poverty Rural transformation in the course of economic development has been realized not only by increased farm production, but also by the involvement of farming household members in nonagricultural activities for regular cash income. However, it should be emphasized that the daily lives of the rural Japanese, particularly the women, have been greatly improved since the introduction of the R-LIP in 1948. This chapter focuses on the R-LIP activities from the perspective of a new improvement approach to rural development.

Education is not only a basic human right, it is also a sector of development that plays a vital role in social economic growth, poverty alleviation, democratization, cultural tradition, inheritance and intercultural understanding. From this perspective, starting with the years following independence from colonial rule in the 1960s, educational development in developing countries has been identified as the responsibility not just of individual governments, but also of the international community; thus, various international cooperation projects have been undertaken. In particular, the 1990 World Conference on Education for All organized by the World Bank, UNESCO, UNICEF and UNDP has reconfirmed the necessity of the international community’s involvement in the development of basic education in developing countries. The Dakar Framework for Action adopted at the 2000 World Education Forum, as well as the Millennium Development Goals’ inclusion of universal access to primary education and the elimination of gender disparity in primary and secondary education, have further spread awareness of the great importance of international cooperation in the field of education.

This chapter describes the Japanese experiences of policymaking in the area of public health, and of providing health services in the course of economic and social development; it also aims to extract lessons that may be applicable to other developing countries. First, the author conducts a brief overview of the history of public health and medical services in Japan in order to understand the background concepts and views with regard to health services in Japan. Second, the chapter reviews maternal health care and family planning policies and services in the nineteenth and twentieth centuries as examples of the Japanese experience in the process of economic and social development. Third, there is examination of the development of universal coverage of health insurance and the new challenges created by demographic and economic changes. Finally, there is discussion of certain lessons from the Japanese experience, in order that the experience can contribute to improving health policies and services in developing countries.

Japan evolved as a new developing country after World War II. Japan was a defeated country in this world war, and 30 percent of its productive equipment had been destroyed in the war. The people had lost the national objective that Japan had followed since the Meiji Restoration in 1868: catching-up with occidental countries by emphasizing national wealth and national strength. However, they rapidly restored this national objective, but, this time, adopted the Peace Constitution, which forbids having armies.

As the preface of its Constitution determines,¹ Japan has established peaceful cooperation with all nations as a priority. Since 1951, when Japan recovered political independence, it has been seeking to play a positive role in the international community based upon the principles set forth in the Constitution. However, just as political interpretations of the Constitution vary, so do concepts of international cooperation and policies on particular issues. While the words ‘international cooperation’ have been widely used since the 1950s (and even earlier), concepts using the word ‘global’ such as ‘global issues’, ‘global governance’ and ‘globalization’ have proliferated since the early 1990s. The global concept is a reflection of the international situation since the cold war, with huge numbers of people and wide areas of the former communist bloc becoming integrated into the market economy and democratic society. The sense of sharing a global environment has become stronger than ever. More importantly, it has become widely recognized that many actors other than nation states and the organizations they comprise them are playing various, sometimes decisive, roles in influencing the world, creating a new agenda and posing new challenges.

It was in the late 1960s that modern environmental policies were created in many industrialized countries, including Japan. Over the ensuing 40 years, Japan’s environmental policies evolved dramatically.

This chapter focuses on some issues of the recent developments in disaster management and policy in Japan. Throughout ancient and modern times, Japan has been sporadically hit by natural calamities due to its geographical and geological location. Moreover, when the country began to modernize, particularly after World War II, people flocked to the industrialized areas and settled in congested urban districts, which made them even more vulnerable to disasters. Thus, Japan has long struggled to minimize disaster risk; the government, NGOs, researchers and related organizations, and individuals have amassed substantial knowledge and technology in this field. Japan’s experience will prove to be a valuable reference point for other countries, particularly developing countries that also have a high incidence of natural disasters.

Japan’s ODA Charter,¹ revised in August 2003, clearly identified peace-building as an important new issue, of which human security was one of the basic principles. Japan’s Mid-Term Policy on ODA elaborated on these principles in February 2005.² JICA,³ the ODA organization responsible for implementing grant-based assistance and promoting technical cooperation among international groups, has been leading the study of peace-building and human security since 1999 and has adopted seven different approaches to its projects.⁴ Japan’s development assistance emphasis is now shifting toward peace-building, though the specifics are still being discussed. This chapter aims to provide an overview of Japan’s recent experience with, and perspective on, this new development paradigm.

Since World War II, the number of NGOs in Japan has drastically increased. Northern and Southern NGOs work on behalf of poor people in developing countries. NGOs are involved in service delivery, education, advocacy, and campaigning for development.