The Political Economy of Japan Bradley M. RICHARDSON

Japan's economy is one of the success stories of the post-World War II era.Literally rising from the ashes of wartime destruction and neglect, the Japaneseeconomy is today the second strongest economy in the world. Given this success,the role of the Japanese government in economic growth and the nature of statesocietyrelationships in economic policymaking is a subject of considerable interest. Itis also a subject of much controversy. Japan is often seen as the world's mostsuccessful example of government directed economic development (1). Admirers ofJapan's success look to her "market-following" government strategies and allegedstrong government-business cooperation as a solution to productivity andcompetitiveness lags in other countries (2). Elsewhere, critics of Japanese policyassert that these same tendencies are a threat to the survival of the world's otherleading economies (3). Both of these groups believe that the Japanese governmenthad a strong, directive role in that country's economy.Some Japan specialists attribute a different, less dominant role in economicaffairs to the Japanese state. These persons see Japanese economic policy as anarena of government-private sector negotiation and some view government inputs assecondary in importance to private sector behavior as a driver of the economy (4).For example, many economist feel that the government’s main contribution toJapan’s economic dynamism was encouragement of high savings and investment,and that Japan’s economy is motivated mainly by private sector competition like thatin other advanced countries (5).Obviously there are many views of Japanese economic development. Allobservers agree that Japan's economy has come far since World War II's end, evenwhile differing on the causes and significance of the government's role in this growth.The differences in interpretation reflect different initial assumptions and differentresearch concerns in an area of considerable complexity. Studies which assert astrong government role normally haven't examined policymaking and policyimplementation processes and ignore the inputs of private interests for this reason.Some studies which downgrade the government role reflect normative preferencesfor free competition.In this chapter, I will review different explanations of Japanese economicgrowth and attempt a synthesis of different views. I will also examine the implicationsof a general model of Japanese politics -conflict amidst cooperation and structure- forpatterns in political economic behavior. We anticipate that we will reject the simple,bureaucratic dominance model of Japanese economic policy. It is likely that Japan'seconomic policymaking will often be pluralistic despite periodic efforts to structurerelationships and make competition orderly and that economic policies will be theresult of negotiation between public and private sector actors. Reflecting theimportance of inter-actor negotiations, policies will include elements of both ministryideology and private firm concerns for profits and market shares. Despite strong and