Blackwell Science, LtdOxford, UKAEHRAustralian Economic History Review0004-89922004 Blackwell Publishing Aisa Pty Ltd and the Economic

History Society of Australia and New Zealand

November 2004443215220Original ArticleEconomic history of Asia: comparative perspectivesPierre van der Eng

Australian Economic History Review, Vol. 44, No. 3 November 2004

ISSN 0004-8992

ECONOMIC HISTORY OF ASIA:

COMPARATIVE PERSPECTIVES
B P v  E
The Australia National University

This article surveys studies that provide a comparative perspective

on the economic history of Asia. The available paradigms tend to be
extrapolations of the relatively well-researched long-term develop-
ment of Japan and China. It remains to be seen whether these apply
to other Asian countries, but they are likely to further comparative
research that will help to focus scholarship on the crucial factors in
understanding long-term economic development in Asia.

Interest in the economic history of Asian countries is growing. Such interest is not
new, but was long the realm of historians with a largely Eurocentric interest in
Asia’s past, and/or historians with an overly nationalistic view of Asia’s past who
understood underdevelopment to be the consequence of (neo)colonial exploitation
in some form or another. Increasingly, the economic history of Asian countries is
interpreted on the basis of analytical concepts that are grounded in economic
theory and/or have been applied to the economic history of other parts of the
world, particularly Europe and North America, to facilitate comparison.
For some Asian countries, particularly Japan, this trend is more advanced than
for others. For some there is a greater involvement of economic historians located
in the respective countries, for others economic historiography involves protago-
nists located overseas. Empirical interest in the common elements of the economic
history of Asian countries is of recent date. As a consequence, there is no Asian
economic history; the themes of debate tend to be country-specific.
The surveys in this special issue of AEHR underscore this nutshell impression
of current trends in the economic history of Asia.1 Apart from assessing the
current trends, this special issue also highlights scholarship that accumulated
within these countries. Despite growing interest in Asia’s economic history, it is
difficult for most scholars to master several languages. As a consequence, the

1 And various other literature surveys confirm this. See for instance the contributions on
Indonesia, Japan, Korea, Taiwan and Malaysia to the EH.net encyclopedia: http://www.eh.net/
encyclopedia/

© Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2004 215
216 Pierre van der Eng

Table 1. Levels of GDP per Capita in Asia, 1820–2000 (1990 international dollars)

1820 1870 1913 1950 1973 2000

Singapore 1,279 2,219 5,977 22,207

Japan 669 737 1,387 1,926 11,439 21,069
Taiwan 747 936 4,117 16,642
South Korea 893 770 2,841 14,343
Malaysia 899 1,559 2,560 7,872
Thailand 707 835 817 1,874 6,336
Sri Lanka 640 850 961 1,492 3,645
China 600 530 552 439 839 3,425
Indonesia 612 654 904 840 1,504 3,203
Philippines 1,066 1,070 1,959 2,385
India 533 533 673 619 853 1,910
Vietnam 546 524 754 658 836 1,677

Note: Vietnam 2000 refers to 1998.

Sources: A. Maddison (2001), The World Economy: A Millennial Perspective (Paris OECD) pp. 304–06; A.
Maddison (2003), The World Economy: Historical Statistics (Paris: OECD) pp. 180–85.

accumulated scholarship published in languages other than English tends to

escape wider attention and interest.
The magnitude of economic growth and relative levels of GDP per capita in
Asia is now a lot clearer thanks to Maddison’s work, as Table 1 shows. Questions
about macroeconomic issues continue to be explored, including the comparative
levels of living, changes in productivity levels, the mobilisation of capital for
investment and the consequences of dependence on trade in primary commodi-
ties. For a country like Japan, historical national accounts data and other macro-
economic statistics are readily available to address these issues, but for other
countries work on compiling the historical national accounts is ongoing. Much
of it is supported by the Asian Historical Statistics Project at Hitotsubashi
University.2
Maddison’s work is likely to inspire further comparative research, but there are
as yet few new studies that use a profound comparative approach spanning most
of Asia. Some recent comparative approaches tend to focus on parts of Asia and/
or a particular theme. An example are the thematic volumes sponsored by the
Economic History of Southeast Asia project at the Australian National University,
including farm agriculture, foreign investment, transport and wage labour, with
volumes on other themes to follow.
Other comparative studies tend to be tentative, but yielded suggestions that the
path of economic development and technological change in Asia was different
from that in Europe and North America. For example, Oshima and Hayami

2 http://www.ier.hit-u.ac.jp/COE/English/index.html. The project expects to publish mono-

graphs with historical national accounts for: Malaysia, Indonesia, Philippines, Thailand, Viet-
nam, Taiwan, China and Korea.

© Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2004
 Economic history of Asia: comparative perspectives 217

argued more or less that the introduction of land-replacing, yield-increasing

technologies in rice agriculture spurred the broad process of growth and structural
change, as it increased labour productivity, facilitated the release of labour from
small-scale staple food production, and allowed countries to escape the ‘Ricardian
trap’.3 The process took place first in Meiji Japan, and later spread to other
countries, most recently to countries that experienced a Green Revolution in rice
agriculture since the 1960s. The process contrasts with the labour-replacing path
of technological change in Europe and North America.
Sugihara has blown new life into the concept of ‘industrious revolution’.4 Based
on the case of Japan, he proposed that industrialisation in Asia may have taken
a different path from Europe and North America during 1820–1950. In short,
labour was mobilised for vertically disintegrated, resource-intensive, relatively
small-scale industrial ventures located in rural areas in Asia. Markets for inputs
and produce developed, which generated institutional innovations such as the
putting-out system that kept transaction costs low. In contrast, manufacturing
development in Europe took the form of vertically integrated, large scale, urban-
based ventures utilising increasingly resource-saving techniques. Drawing paral-
lels between Japan’s historical experience and the post-war experience of the
newly industrialising economies, Hayami presented a similar perspective, empha-
sising the borrowing and local adaptation of foreign technology and the develop-
ment of institutions conducive to the development of markets resulting in the
development of an internationally competitive, labour-intensive, often small-scale
manufacturing industry.5
In sum, this work suggests that underdevelopment in Asia’s past can be under-
stood as a failure to adopt, adapt and/or develop technologies and institutions
that suited the relative supply of productive resources in Asia. Understanding
underdevelopment implies understanding the reasons why Japan’s path of devel-
opment did not materialise elsewhere until recent decades. While some may argue
that the stance of government policy and the possibly exploitative nature of
colonial rule made the difference, evidence that this necessarily impeded the
broad process economic development of colonised countries is not straightfor-
ward.6 Others, like Roy for India, would maintain that relative endowments of
scarce productive resources, including land, capital, labour and – in the case of
rice agriculture – water, were the parameters that determined the available devel-
opment options for better or for worse.7
Although possibly apt for East Asia, the ‘industrious’ development hypothesis
may not apply neatly to other parts of Asia, particularly parts not characterised
by land constraints, high population density, low opportunity cost of labour and

3 Oshima, Economic Growth, 17–27; Hayami, Development Economics, 72 and 86–88.

4 Sugihara, East Asian path.
5 Hayami, Toward an alternative, and Hayami, Toward an East Asian model.
6 See, e.g. Van der Eng (Exploring exploitation), Kimura (Profitability), and the surveys on India,
Korea and Taiwan in this issue.
7 Roy, An endangered discipline.

© Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2004
218 Pierre van der Eng

rice as the preferred staple crop. For example, rice farmers in under-populated
parts of mainland Southeast Asia achieved a much higher labour productivity
during much of the twentieth century than their colleagues in Japan, despite
achieving relative low crop yields.8 In addition, although dependence on primary
exports and on international commodity prices could generate windfall gains,
Huff showed that it also limited Malaysia’s pre-war options for industrialisation.9
Sugihara also argued that East Asia experienced a successful process of gradual
development of labour-intensive agricultural and industrial technology during
1500–1820 that allowed it to overcome the scarcity of land. While the process
saw no improvements in labour productivity or output per capita, it allowed
particularly China and Japan to avoid the worst Malthusian checks, and yielded
levels of living that only after 1820 started to diverge considerably between East
Asia and Europe. Sugihara supports Pomeranz’ argument that a sudden improve-
ment in access to land in North America allowed Western Europe to break its
resource constraint, leaving East Asia in its wake since 1820 and increasing the
divergence of GDP per capita between Asia and North America and Europe.10
A sobering perspective on development opportunities based on the relative
availability of productive resources ties in with the growing research interest in
the functioning of markets within and between countries: the ways in which firms
mobilised labour and capital; the role of institutions like property rights in factor
and product markets and the ways in which companies mitigated uncertainty and
risk; the signalling function of prices and wages; the role of foreign exchange
markets; the mobility of products, labour and capital, and the impact of transport
improvements on market integration; and how governments enhanced the allo-
cating function of markets.11 Much of this research starts to bridge the divide
between economic and business history.
The attention to markets is supported by a growing interest in intra-Asian trade.
Past interpretations often suggested that economic change in Asia, or the lack of
it, was the result of the development of intercontinental trade. New research
emphasises that significant but intricate commercial networks with their own
dynamics continued to span Asia and that much of the trade involved rivalry and
co-operation between Asian and European firms.12
8 Van der Eng, Productivity and comparative advantage.
9 Huff, Boom-or-bust. Dick (Nineteenth-century industrialization) explained that colonial rule in
Indonesia can not be blamed for Java’s failure to achieve a greater degree of industrialization,
as export success placed significant limitations on any such effort.
10 Pomeranz (Great Divergence) based his comparison largely on China and the UK, using indicators
of levels of living that suggest that both were generally not far apart. Van Zanden (Rich and
poor) demonstrated that the same applied to a comparison of Java and the Netherlands, and that
more significant differences in levels of GDP per capita can be explained on the basis of a much
greater degree of income inequality in the latter. Pomeranz (Continuities) later subscribed to
Sugihara’s interpretations, but noted that some European economies followed a development
path more like the ‘Eastern’ rather than the ‘Western’ path, and vice versa.
11 For example: Collins, Labor mobility; van der Eng, Silver standard; Williamson, Globalization;
Huff, Monetization; Booth, Linking. See also the surveys on Japan, India and China in this issue.
12 E.g. Sugiyama and Guerrero, International Commercial Rivalry; Sugiyama and Grove, Commercial
Networks; Dick and Rimmer, Cities, Transport.

© Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2004
 Economic history of Asia: comparative perspectives 219

Research in economic history is crossing the divide of the Second World War.
It is likely to result in more research into the functioning of markets, the role of
market-conducive institutions and the character of technological change in Asia
in the post-war decades. Crafts recently interpreted the acceleration of economic
growth in much of Asia as a Gerschenkronian escape from economic backward-
ness, a process of ‘catch-up’ orchestrated by ‘developmental states’.13 Govern-
ments in various countries did the institutional groundwork that lowered
transactions costs in imperfect markets, which was conducive to an outwardly
orientated growth process spurred by competition to succeed in world markets.
Further institutional change continued to reduce transactions costs, which sus-
tained growth.
It remains to be seen whether Crafts provided a sufficient explanation. The
largely hypothetical interpretations of Hayami and Sugihara suggested that, given
differences in relative resource availability, particular types of technologies were
viable in an Asian context. Hence, technological change in the catch-up process
may not only have been one of transfer from the West, but also one of adaptation.
Is the rest of Asia still catching up with Japan rather than the West?

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