The (Japan‐Born) ‘Flying‐Geese’ Theory of Economic Development Revisited – and Reformulated from a Structuralist Perspective
| Published date | 01 October 2011 |
| Date | 01 October 2011 |
| DOI | http://doi.org/10.1111/j.1758-5899.2011.00093.x |
| Author | Terutomo Ozawa |
The (Japan-Born) ‘Flying-Geese’
Theory of Economic Development
Revisited – and Reformulated from a
Structuralist Perspective
Terutomo Ozawa
Colorado State University
Abstract
The Japan-born ‘flying-geese (FG)’ theory of growth has recently gained recognition in academia and popularity in the
media. Since Kaname Akamatsu introduced his ideas in a very broad fashion in the 1930s, opportunities have
abounded for further elaboration and application to contemporary development issues. This article reviews some of
his key ideas and presents a reformulation from an evolutionary structuralist perspective. The oft-used, yet vague,
concept of ‘the ladder of economic development’ is defined in terms of a ‘leading-sector’ stages model, à la
Schumpeter – and what comes next as a new rung is considered. The enabling mechanisms of structural upgrading
are explored, and the dynamics and benefits of an FG formation of aligned countries are stressed. Also, a stages
(FG-theoretic) model of balance of payments is introduced to discuss the financial issues of ‘borrowed growth’ and
‘global (G2) imbalances’. The dynamics of structural upgrading and interactive growth via trade and investment within
a hierarchy of countries is the essence of these reformulated FG models, which make up what is now increasingly
shaped and recognized as ‘new structural economics’.
Policy Implications
•The FG theory stresses interactive growth via emulative learning among the economies operating at different stages
of growth along the ladder of economic development.
•Policy makers need a clear understanding of the ladder that offers both inter- and intra-industrial routes to climb
over the course of industrial upgrading.
•Interactive growth is made all the more efficient when countries cluster cooperatively in a regional hierarchy,
reaping ‘economies of concatenation’ (interactive stimuli) and benefiting from ‘comparative advantage recycling’
(staggered export drives that avoid a fallacy of composition, i.e., the impracticality of simultaneous exports by all
economies).
•Emulative learning is facilitated by multinationals’ (MNCs’) foreign direct investment (FDI) and other activities that
accompany technology, managerial skills and access to export markets – a powerful catalyst for industrial upgrading
and development.
•‘Borrowed growth’ is the finance mode of interactive growth, whose benefits and risks vary with the development
stage, institutional set-up and policy.
•Growth stages fundamentally and structurally determine external imbalances, but short-term, situational and coinci-
dental macroeconomic factors also magnify the imbalances between nations, as is the case with ‘G2 imbalances’.
These two causes should be distinguished, since the latter alone is amenable to immediate adjustments in fiscal,
monetary and exchange rate policies – but not the fundamental one.
The ‘flying-geese (FG)’ theory of economic development,
originally expounded by Japanese economist Kaname
Akamatsu (1897–1974) in the 1930s (inter alia, 1935,
1961, 1962), has recently gained some currency in both
academia and the media. Radelet and Sachs (1997) rec-
ognize it as a major doctrine of catch-up strategy, along
with the ‘big push’ and ‘import substitution’. Unfortu-
nately, however, Akamatsu presented his ideas in very
Global Policy Volume 2 . Issue 3 . October 2011
ª2011 London School of Economics and Political Science and John Wiley & Sons Ltd. Global Policy (2011) 2:3 doi: 10.1111/j.1758-5899.2011.00093.x
Research Article
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