Learning to Industrialize
From Given Growth to Policy-aided Value Creation
By Kenichi Ohno
Routledge – 2012 – 256 pages
This book proposes a new, pragmatic way of approaching economic development which features policy learning based on a comparison of international best policy practices. While the important role of government in promoting private sector development is being recognized, policy discussion often remains general without details as to what exactly to do and how to avoid common pitfalls. This book fills the gap by showing concrete policy contents, procedures, and organizations adopted in high-performing East Asian economies.
Natural resources and foreign aid and investment can take a country to a certain income level, but growth stalls when given advantages are exhausted. Economies will be caught in middle income traps if growth impetus is not internally generated. Meanwhile, countries that have soared to high income introduced mindset, policies, and institutions that encouraged, or even forced, accumulation of human capital – skills, technology, and knowledge. How this can be done systematically is the main topic of policy learning. However, government should not randomly adopt what Singapore or Taiwan did in the past. A continued march to prosperity is possible only when policy makers acquire capability to formulate policy suitable for local context after studying a number of international experiences.
Developing countries wanting to adopt effective industrial strategies but not knowing where to start will benefit greatly by the ideas and hands-on examples presented by the author. Students of development economics will find a new methodological perspective which can supplement the ongoing industrial policy debate. The book also gives an excellent account of national pride and pragmatism exhibited by officials in East Asia who produced remarkable economic growth, as well as serious effort by an African country to emulate this miracle.
'Professor Ohno has written a pragmatic, clear-eyed argument in favor of 21st century industrial policy and provides examples and ways that developing countries can both comply with WTO rules and hasten the development of industrial sectors in which they can develop profitably. This is a valuable addition to the literature on industrial policy, as it moves beyond the old "state vs. market" arguments and focuses attention on the steps and capacities that need to be developed. Practitioners as well academics interested in industrial policy will find this book worth reading.' — David O. Dapice, Associate Professor of Economics, Tufts University, U.S.A.
Introduction Part 1: Ideas and Methods 1. The Developmental Trap 2. Industrial Policy in the Age of Globalization 3. Ingredients of Proactive Industrialization 4. Policy Procedure and Organization Part 2: Country Studies 5. Meiji Japan: From Feudalism to Industrialization 6. Singapore: National Productivity Movement 7. Taiwan: Policy Drive for Innovation 8. Malaysia: Trapped in Upper Middle Income 9. Vietnam: Growth without Quality 10. Ethiopia: The Growth and Transformation Plan
Kenichi Ohno is Professor at the National Graduate Institute for Policy Studies, Tokyo. He was born in Kobe, Japan and holds a PhD in Economics from Stanford University, California. He worked at the International Monetary Fund and taught at the University of Tsukuba and Saitama University before assuming the current position.