The book entitled The Economic Development of Japan: The Path Travelled by Japan as

a developing country. This is a good account of the economic development of Japan on where
they start and what they are gone through in achieving their economic supremacy in Asia; it is
authored by Kenichi Ohno. He teaches at the National Graduate Institute for Policy Studies in
Tokyo. His main interest is how 21st century later comer countries can industrialize under
globalization pressure from the economic as well as political and social perspectives.
Chapter 1.Modernization for late comers. In any country like Japan as being one of a
developing country here in Asia, the path that Japanese modernization can be interpreted as the
process of various domestic actors including the government, business, communities and
individuals responding to influences coming from abroad. Japan greatly copied its ideas from the
western world, but since developing countries like Japan developed under the strong presence of
globalizing pressure. Despite of the fact that there is a lot of foreign invaders wanted to took foot
hold over Japan, the idea of integration and nationalism still intact that greatly help them to be
modernized. Even though, Japans modernization is somewhat late but actually, this is just too
early especially for Japan. Japan as the first country to become modernized and developed with
their own efforts trying to apply the idea of others but in a different approach.
Chapter 2. The Edo Period: Preconditions for industrialization. A particularly important
development during the Sengoku and early Edo period was the removal of various middle layer
organizations such as Buddhist temples and sects, manorial owners and resident landlords which
had existed since the ancient times through the Middle Ages. Power decentralization and indirect
rule were replaced by direct and unified rule by the newly emerged daimyo in each region. This
movement which was started by the Sengoku was being continued and completed by the Edo
government. The story of Japans economic development could be traced back from the Edo
period because of they established and the basis for their modernization in the later years. The
political unity and stability, agricultural development in terms of both area and productivity, the
development of transportation and the emergence of nationally unified markets, the rise of
commerce, finance and the wealthy merchant class. And also the rise of pre-modern
manufacturing like food processing, handicrafts and etc., the industrial promotion by local
governments and most of all high level of education. These are the features of Edo period which
are commonly regarded by many scholars.

Chapter 3, 4, 5, 6. Meiji period. The key goals of the new government, the Meiji government
was established and run by young samurais from strong Hans in western Japan especially the
Satsuma, Choshu, Tosa and Hizen, and a few noblemen. The Meiji government had a very clear
and determined goals or policy objective, rapid westernization and modernization of Japan.
Actually, the first biggest fear or external challenges of Japan was to avoid being colonized by
the west. But this fear subsided in the early Meiji period as Japan began aggressively absorb
western systems and technology while retaining national unity and identity. For the rest of Meiji
and beyond, the top national priority was to catch up the west in every aspect of civilization, to
become Japan a first class nation as quickly as possible. The national slogan was Fokoku Kyohei,
which means rich country, strong army. In order to modernize Japan, the Meiji government had
three goals, industrialization to make Japan economically modernized, introducing a national
constitution ad parliament, to politically modernize and external expansion, to military
modernization. Japan in the Meiji period greatly focuses on the economic side, in chapter 4,
importing and absorbing technology, this was the features of Meiji industrialization, the very
strong private sector initiative supported by appropriate official assistance, successful import
substitution in the cotton industry and parallel development of the modern sector and the
indigenous sector. Meiji government wanted rapid industrialization with the official policies of
introducing western institutions, building infrastructures, hiring foreign advisors, education and
training, assisting Zaibatsu and so on were all important. Japan developed major industries like
cotton industry. There were many contributing factors to industrialization inherited from the
previous Edo period. They included nationally unified markets, transportations and distribution
networks, a strong merchant tradition, the development of financial services and a well educated
population.
Chapter 7. World War 1 and 1920s: Export led Boom and Recession. When the First World
War erupted, its consequences for the Japanese economy were at first uncertain. As the European
major powers began to fight each other, their international trade was suspended, which meant
that Europe could no longer supply textiles, machinery and chemicals to the rest of the world.
Japan feared that there investment would be affected. But actually, it did not, World War 1
became clear to Japan bringing a huge bonanza to the Japanese economy, at least in the short run,
because of the sudden increase in global demand for Japanese products.

An enormous effort led boom was generated because global demand shifted from Europe to
Japan. Japanese manufactured products were still of inferior quality but would substitute for
European products which became unavailable.
Chapter 8. The Showa Financial Crisis of 1927. The Showa financial crisis occurred after the
post-world war 1 business boom in Japan. Many companies invested heavily in increased
production capacity in what proved to be an economic bubble. The post 1920 economic
slowdown and the great Kanto earthquake of 1923 caused an economic depression, which led to
the failures of many businesses. The government intervened through the Bank of Japan by
issuing discounted earthquake bonds to overextended banks. In January 1927, when the
government proposed to redeem these bonds, rumor spread that the banks holding these go
bankrupt. In the ensuing bank run, 37 banks throughout Japan including bank of Taiwan and the
second tier Zaibatsu Suzuki Shoten, went under. Prime Minister Wakatsuki attempted to have an
emergency decree issued to allow the bank of Japan to extend emergency loans to save these
banks, but this request was denied by the Privy Council and he was forced to resign. Wakatsuki
was succeeded by Prime Minister Tanaka Giichi, who managed to control the situation with a
three week bank holiday and the issuance of emergency loans. However, as a result of the
collapsed of many smaller banks, the large financial branches of the great Zaibatsu houses were
able to dominate Japanese finances until the end of World War II.
Chapter 9. The 1930s and the war economy. Japan experienced the deepest economic
downturn in modern history during 1930-1932. This should not be confused with the banking
crisis of 1927. In 1930s, political and intellectual thinking gradually shifted from economic
liberalism towards more economic control under state management. There were many reasons
for this, including influence of Marxism, apparent success of USSR, Showa Depression, the idea
that deflation was worsened by excess competition and disappointments with politicians and
political parties. Many considered that the days of the US style free market economy were over
and from now on, state control and industrial monopoly would strengthen the competitiveness of
the national economy.

Chapter 10. Recovery. Japan was under US occupation form 1945-1951. During this period,US
policy on occupied Japan shifted significantly. The real intention of US occupation was to
delimit Japan. The US wanted to cripple the Japanese economy so that it would never be able to
produce military goods again. No heavy industry was to be allowed. They also introduced
democracy, since the lack of democracy, monopolistic business, lack of workers rights,
exploited peasants was considered to be the cause of Japans military invasion. In addition, a new
constitution was drafted to Japan with the guide of US.
Chapter 11. Post-war High Growth 1950s-60s. After the recovery period of 1945-49 and the
Korean War in 1950-1953, the Japanese economy entered into a period of high growth. From the
mid 1950s to the early 1970s, the average real growth was roughly 10%, this very high and
sustained growth transformed the Japanese economy and society significantly.
Chapter 12. Economic Maturity and Slow Down. Japans high growth came to an end in the
early 1970s. One important fact that this growth slowdown was common to all industrial
countries like Japan, so the reasons for this slowdown must be at least partly global, although
domestic factors may have played a role. Transition to lower growth was natural and inevitable
because the Japanese economy had caught up with the US and European economies. During the
catching up process, a developing country like Japan can import technology and new systems
which exist in the develop world. Because when Japan copied and wanted to become part of the
developed world, they can no longer copy others but must create something new order to grow.
Naturally, Japans creating their own path is handed and slower that following someones else
path.
Chapter 13. Bubble Burst and Recession. Japan economically in the past was not doing well.
Japan was suffered slow and even negative growth coupled with price deflation. Economic
statistics remain gloomy and more importantly, the nations mood has become pessimistic. Some
say Japan is still a very high income country, others say transition to a new economy is being
prepared under a recession and some companies of Japan were doing well. But overall, it cannot
be denied that Japans economic performance in the last ten years was less than expected.

Japan greatly evolved through times especially in terms of their economy. They became
what they are right now, a developing country with all their efforts to become one; it could be
traced back from the Edo period. Despite of all the hardships they gone through especially from
the effects of World War II, they still managed and recovered. Japan really proved to other
nations especially to the western world that they can also compete to those emerging superpower
countries.
In totality, this book is very informative and greatly helps in understanding the path
travelled by Japan to become a developing country in terms of economy. This is a good book to
read. It is really a good account for the developments of Japan from the beginning until to the
present. Japan travelled so far to reach its status today which is greatly worth it for them, despite
of the fact that Japan really experienced economic instability and failure to the World War II, but
still they stand and recovered.

The Economic Development of Japan:

The Path Travelled by Japan as a developing
country
By: Kenichi Ohno

Submitted by: Mark Paglinawan

Submitted to: Prof. Jamelyn Palattao