Japan, the System That Soured

Japan, the System That Soured

The Rise and Fall of the Japanese Economic Miracle

eBook - 1998
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& Francis Publishing

After seven long years of economic malaise, it is clear that something has gone awry in Japan. Unless Japan undertakes sweeping reform, official forecasts now warn, growth will steadily dwindle. How could the world's most acclaimed economic miracle have stumbled so badly? As this important book explains, the root of the problem is that Japan is still mired in the structures, policies, and mental habits of the 1950s-1960s. Four decades ago while in the "catch-up" phase of its economic evolution, policies that gave rise to "Japan, Inc". made a lot of sense. By the 1970s and 1980s, when Japan had become a more mature economy, "catch-up economics" had become passe, even counterproductive. Even worse, in response to the oil shocks, Japan increasingly used its industrial policy tools. not to promote "winners", but to shield "losers" from competition at home and abroad. Japan's well-known aversion to imports is part and parcel of this politically understandable, but economically self-defeating, pattern. The end result is a deformed "dual economy" unique in the industrial world. Now this "dualism" is sapping the strength of the entire economy. The protection of the weak is driving Japan's most inefficient companies to invest offshore instead of at home. Without sweeping reform, real recovery will prove elusive. The challenging thesis articulated in this book is receiving widespread media attention in the United States and Japan and is sure to provoke continuing debate and controversy.

Book News
How did the Japanese economic system go from a 9.3% annual real GDP growth in the period from 1956 to 1973 to one of only 1% in the past decade? The author argues that the problem is structural, rooted in the institutional practices that served Japan so well in the immediate post-war years. Both the enshrinement of cartels and protectionism, and the creation of a dual economy of strong exporters but inefficient domestic sectors have driven the most efficient of Japan's companies to invest overseas, hollowing out an economy that depended on them to subsidize weaker domestic companies. What Japan needs, he contends, is sweeping reforms that allow for greater competition, even from foreign based firms; a leaner financial sector; and competitive elections. Annotation c. by Book News, Inc., Portland, Or.

Publisher: Armonk, N.Y. : M.E. Sharpe, c1998
ISBN: 9780585001708
Characteristics: 1 online resource (xvi, 463 p.) : ill


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