This paper briefly explains the concept of dualistic development, the coexistance of modern and traditional sectors, as observed in Japanese economic development. Instead of considering the traditional components as residuals of an economy, the author focuses on the active roles that these elements have played and divides the history of Japanese economic development into four phases, distinguished by the different characteristics of these roles. According to the author, the experience of Japan could have relevance to contemporary developing nations.
As an example of application, the author proposes the use of "subjective equilibria" for studying intersectoral migration with the existence of surplus labor in the traditional (or rural) sector
