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Regional Development Policies in China and Indonesia and Japan’s Experience

Tokyo Workshop

November 31 and December 1, 1998

Co-organized by the World Bank and
the Overseas Economic Cooperation Fund (OECF) of Japan

Abstracts of Papers Presented

Regional Development Policies in China and Indonesia and Japan’s Experience
Junichi Yamada

Dr. Junichi Yamada’s paper on regional development policies, provides an account of the regional income disparities in East Asia and Brazil, drawing attention to fiscal sharing issues and local government capacity. The paper looks at the geography of income disparity in each country. He presents measures of income disparity and its trend in Brazil, Indonesia, China, and Japan over the past two decades. A comparison of the incomes of the richest and poorest regions of each country revealed that regional income disparity has increased in China and Indonesia, despite the fact that inequality was targeted in their recent development plans. Dr. Yamada argues that decentralization led to a widening of regional income disparities. However, Japan succeeded in lessening regional income disparity by 40 percent in the period of high growth during the 1960s and 1970s. This was done by way of process that emphasized urban-rural linkages, investment in basic rural infrastructures such as transport and education. Furthermore, tax exemptions and other incentives also served to foster industries in low income regions.




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