Institutions, Industrial Upgrading, and Economic Performance in Japan: The 'Flying Geese' Paradigm of Catch-up Growth.

AuthorLeightner, Jonathan E.
PositionBook review

Institutions, Industrial Upgrading, and Economic Performance in Japan: The 'Flying Geese' Paradigm of Catch-up Growth, by Terutomo Ozawa. Northampton, MA: Edward Elgar. 2005. Hardback: ISBN 1 84376 959, $90.00. 234 pages.

In this book, Ozawa paints a picture of Japan (the second goose) being forced to follow the United States (the lead goose). He implicitly compares the United State's influence on the world to Rome's past domination of the world by repeatedly talking about "Pax Americana." The Western World carving up Asia into colonies in the 1800s was called "hegemony." Thus, there are strong negative connotations invoked when Ozawa calls post-WWII growth "Hegemon-led Growth Clustering," where the United States is the aggressor. He compares Japan's movement towards greater globalization to putting on a "golden straitjacket"--a straitjacket designed and promoted by the United States.

Ozawa begrudgingly admits the United States helped Japan develop after WWII. He quickly dismisses this generosity by saying "it should be noted, however, that the occupying Allied Forces, at first intended to punish Japan by stripping machinery and equipment from its factories and shipping them out as war reparations to other Asian countries that had suffered Japan's military aggression. But the communist takeover of mainland China and the start of the Cold War forced the occupation authorities to reverse their policy in favor of Japan's economic reconstruction" (p. 34).

The communist threat also compelled the United States to hand pick a conservative government for Japan after WWII and to insist on institutional, "democratic" arrangements that would guarantee the continuation of that conservative government to today (pp. 188-207). These institutional arrangements gave controlling political power to an inner-dependent (ID) sector which includes agriculture, transportation, wholesale and retail trade, construction, banking and real estate. It is the relative stagnation of this ID sector that is to blame for Japan's problems between 1987 and 2002. Ozawa does not have to connect dots so closely placed together--it is clear, the United States caused Japan's deflationary recession of the 1990s.

If Ozawa is correct, the United States is the lead goose and Japan is victimized by its secondary position. In contrast, when real wild geese fly, the first goose breaks the air's resistance, making it easier for the following geese to fly. Ozawa uses the flying geese...

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