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Comparative Industrialisation, Russia India Japan Notes

Economics and Management Notes > Econ History: Comparative Industrialisation: Russia, India, Japan Notes

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?Week 1: Theories and Long-Term Perspectives Do late industrialisers follow the same path?
o Yes - Rostow. 5 stages of industrialisation
? Emphasis on agricultural productivity, functioning markets, stable govt. o No - Gerschenkron. "Relative Backwardness"
? Emphasis on state substitution of market, capital-intensive drive o Similarities? Transfer of resources from agriculture to industry:
? Either increase productivity in agriculture (Japan, India) or
? Repress peasant standards of living (Russia) Supplementary models: o Marxism
?Both the above treat backwardness as bad - not necessarily so; "missing preconditions" can lead to socialism, weakest link theory o Dependency Theory
? Resources extracted from industrialised nation to feed periphery nations o Institutional economics - see Douglas North
? State must build institutions to reduce transaction costs e.g. property rights and contract law o Dualism models - see Arthur Lewis
? Transfer of labour from agriculture, tradition to modern industry
? Application of incentive and institutional theories o Whig history versus cultural pessimism
? The past as an inevitable progression towards ever greater liberty and enlightenment versus "institutional sclerosis" (see Olson) o The role of culture
? Quality of labour, capital versus quantity
? Enterprise, social approval etc. Psychology of society

Week 2: Agricultural Performance and Exports 1870-1914 Aim? Agricultural surplus o Sources of agricultural growth:
? Demand: Industrialisation, Urbanisation and Exports

Agriculture's share in national income fell

Japan: More inter-regional trade, less crop diversification

India, Russia: Crop diversification to global grains

Russia: Introduced railways - cost of transport fell

IMP! Move from subsistence economy to marketplace! Because of market, goods need to be cost-efficient. Thus, transportation etc innovations come in
? Supply: Land and Land Yield

Japan - Land intensive Meiji Noho

India - Land extensive - moved to North India, irrigation problem

Russia - Land ex- moved beyond Central Black Earth to Baltic, South West
? Problems:

Historians disagree on extent or measurement of change

Unexplained - why was growth slower in I, R?
o Institutions - property rights, credit markets need to be robust!

o Incentives - collectivisation = loss of profit or gain of knowledge?
Tragedy of the Commons?
Week 3: Incentives and market developments before 1914: Opportunities for peasants and farmers INCENTIVES, INSTITUTIONS, INFRASTRUCTURE
? Property rights (Institution) o Japan
? evolved towards the small household as a unit, role of daimyo?
? thus, better able to contribute labour to industry
? started marketisation, loans very early o India
? given to zamindars (Permanent Settlement) in east, and peasant cultivators (Ryotwari) in west and south
? in both, risks of tax and exports o Russia
? Unequal asset holdings
? agriculture live-stock intensive, biased towards wealthy farmer
? conflicts between Kulaks and small farmers
? Taxation System (Institution) o Japan - Tax reforms, fixed obligations, cash tax = good incentives!
o India - Tax in kind, taxes fixed but great var(food prices) =poor incentives
? Roving versus stationary bandit o Russia
? Peasants squeezed under Witte, War Communism
? But, indirect taxation debate exists, were they all that bad off?
? Redemption payments
? Peasant collective / community (Institutions and incentives) o Japan
? shared irrigation networks
? increased communal know-how o India
? certain communities helped substitute for public sector credit markets, but high interest rates were disincentive for growth
? "sowkar's slow taqavi loans" or moneylender = peasant insecurity. o Russia - communes economically unsuccessfulOther factors accounting for differences in agricultural growth: (Infrastructure) o Transportation costs (Suez Canal, railways) o Profit not the only incentive ? Russia = subsistence, India = U(food, income, leisure) o Irrigation (e.g. Punjab's success) o Environmental changes

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