Can Capitalism Solve Its Own Rural Problems? Japanese Lessons for the World Bank's Vision of Rural-Led Development

Abstract

Recent research and policy advice by international development organizations have, by their own account, sought to reverse a prior neglect of conditions in agriculture and rural areas. In pursuit of this, they have developed a vision of dynamic but incremental development in rural areas, anchored in a smallholder-based and economically diversified market economy. This vision, articulated in the World Bank's 2008 World Development Report and continuing to animate research and policy advice today, presents itself as a solution to persistent poverty in the world's least developed countries. This paper adopts a historical sociological lens to use the case of Japan, in the period from the latter half of the nineteenth century to the opening decades of the twentieth, to assess how realistic this vision is. This analysis shows that the lessons of Japan's experience are chastening for this vision of rural development. The mechanisms of growth in Japan were remarkably similar to those advertised by the World Bank's vision. However, its rural economic dynamism was based on deep socioeconomic inequalities and brought improved material conditions and greater economic security to agricultural households only with excruciating slowness, if at all. Rather than demonstrating the potential of incremental, market-oriented rural development to offer a path towards widespread poverty reduction, Japan instead serves as a warning of this development model's limitations.