Thesis Defense Summary

I-1 Objectives and findings

　　Why Thailand lagged behind Japan in entering the “epoch of modern economic growth” in the definition of Simon Kuznets (1966) in spite of their similar initial conditions in the mid-19th century has been one of the major puzzles in the modern history of East Asia. This study aims to shed light on this question from the aspect of the interactions between education and natural resource endowments. The basic hypothesis tested in this study is that Thailand, which was traditionally endowed with abundant natural resources relative to Japan, has felt it less compelling to increase the productivities of the resources for surviving in international competition and, hence has had smaller incentives to invest in education as a key variable for promoting agricultural intensification and industrialization beyond the scope of traditional rice farming.
　　 This study tries to test this hypothesis by means of both the documentation of institutional changes in the course of economic development and an econometric analysis based on newly prepared long-term time-series data. Korea, in addition to Japan and Thailand, is included in the comparison as it represents a case characterized by meager natural resource endowments similar to Japan and has achieved better educational and economic developments than Thailand after World War II. While the quantitative analysis will mainly pertain to the period after World War II, the study of institutions that influenced educational development and economic changes in these countries, particularly Thailand and Japan, will cover the period from the latter half of the 19th century when both countries began to actively participate in trade with Western nations.
　　Entering into international trade at the same time under different endowments of natural resources, Thailand and Japan experienced different patterns of economic growth involving different institutional changes in the late 19th and early 20th centuries. Throughout those years, rice cultivation based on traditional technologies was the major source of food and income for Thailand, and its educational development objective in the late 19th century did not extend beyond the purpose of training a limited number of top elite for staffing government offices under the king. Mass education was not promoted until the early 1920s, and an overall economic development policy was not initiated until the early 1960s.
　　Unlike Thailand, Japan, under strong population pressure on limited land resources, has had to promote modern economic growth based on productivity improvements in agriculture and industry since the Meiji Restoration. Meiji Japan invested heavily in building modern economic institutions including education and research in support of modern economic growth. It began to promote mass education in the early 1870s.
　 　An econometric test by applying the cointegration and error correction regression models on pooled time-series data of Thailand, Japan, and Korea confirms the negative effects of land resource endowments on educational investment, agricultural intensification, and industrialization. It also confirms the positive effects of the educational stock on agricultural intensification and industrialization. These results imply that Thailand failed to effectively mobilize the incomes generated from the exploitation of natural resources for investment in physical and institutional infrastructure including education and research. Such investments are critically important for bringing about modern economic growth involving the processes of agricultural intensification and industrialization.
　　Thailand, however, did not entirely neglect investment in education and other infrastructure for modern economic growth during its vent-for-surplus development stage. Though much slower than in Japan, by the 1970s, Thailand’s stock of education as measured by the average number of years of schooling per person in the working-age population had reached the level of Japan in the 1920s, which could well be sufficient to support the spurt of labor-intensive industries. It is most likely that accumulated investment in education since the vent-for-surplus stage had prepared an important condition for Thailand to join in the East Asian Miracle in the recent three decades.
　　Yet, it is also very likely that, if Thailand had used its incomes obtained from the exploitation of natural resources more efficiently, its entry into epoch of modern economic growth would not have lagged so far behind Japan. Thailand’s experience in the late 19th and early 20th centuries seems to imply that today’s developing countries endowed with abundant natural resources will not be able to achieve sustainable economic growth unless they effectively mobilize incomes generated from the exploitation of their abundant natural resources for investment in education and research, among others, to support agricultural intensification and industrialization.

I-2 Organization

　　This dissertation is organized as follows:

Chapter 1 Introduction
Chapter 2 Theoretical framework
Chapter 3 Data sources and estimation procedures
Chapter 4 Historical overview of educational and economic developments in Thailand compared with Japan and Korea
Chapter 5 Econometric tests
Bibliography
Appendix

　　Chapter 1 specifies the objectives and approaches of the dissertation.
　 　Chapter 2 discusses the theoretical issues concerning the importance and determinants of educational development for long-term economic growth through detailed review of the relevant literature. This chapter argues that educational development plays a vital role in economic development because it enhances people’s information processing ability, which is important not only for workers to perform a certain task more effectively using a given technology, but also for facilitating development and the adoption of new technologies. However, educational development is a complicated process with its scale and speed affected by various factors including social environments and resource endowments. Two countries with similar social environments but different natural resource endowments may have different timing in accelerating investment in education for entering modern economic growth characterized by productivity improvements in both agriculture and industry. The chapter will also postulate basic hypotheses on the effect of abundant natural resource endowments on the lag of Thailand relative to Japan and Korea in entering the “epoch of modern economic growth” in the Kuznets definition.
　　Chapter 3 is devoted to explaining the data sources and the procedures of preparing the data of macroeconomic statistics such as GDP, population, and labor force as well as the data on educational investment and educational stock in Thailand. GDP will be measured in 1990 US dollars in terms of purchasing power parity and labor force in employed persons in the working-age population (the 15-64 year-old population). School enrollment ratio in the school-age population (the 6-20 year-old population) and school enrollment ratios by different levels of education will be used as proxies of investment in education, whereas the average number of years of schooling per person in the working-age population will be used as a proxy of the educational stock. This chapter also explains the sources of data for the proxies of natural resource endowments, agricultural intensification, and industrialization in the three countries under study.
　　Using historical documents together with the data prepared in Chapter 3, Chapter 4 compares among Thailand, Japan, and Korea in terms of their natural resource endowments, economic and educational developments since the late 19th century in order to provide a concrete historical perspective on the hypotheses to be tested in Chapter 5. The comparison involves different policy choices that caused different economic and educational developments in these three countries. It is confirmed that Thailand has been more favorably endowed with land resources, while its economic growth involving the processes of agricultural intensification and industrialization as well as educational development have been slower compared with those of Japan and Korea. These descriptive statistics provide intuitive support for the hypothesis that Thailand’s slower economic development compared with Japan and Korea has been largely due to its slower educational development induced by its more abundant endowments of land resources. This hypothesis implies that abundant land resource endowments have a negative effect on educational investment, resulting in slower growth in the stock of education that is crucial for modern economic growth. Abundant land endowments may also impede modern economic growth directly because they may give a negative incentive on the provision of public support other than education for agricultural and industrial productivity improvements.
　　Chapter 5 attempts econometric analyses of the three operational hypotheses emerging from the discussions in the previous chapter. The cointegration and error correction regression models applied on pooled time-series data of Thailand, Japan, and Korea are used to test the following three operational hypotheses: (1) land resource endowments have a negative effect on educational investment, (2) educational stock has a positive effect on agricultural intensification, while land resource endowments give a negative incentive on the provision of public support other than education for agricultural intensification, and (3) educational stock has a positive effect on industrialization, but land resource endowments give a negative incentive on the provision of public support other than education for industrialization. The regression results confirm these hypotheses.
　　Chapter 6 concludes the study and provides some policy implications.