Japan's Economic Dilemma: The Institutional Origins of Prosperity and Stagnation

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
CONTENTS......Page 9
ACKNOWLEDGMENTS......Page 11
CHAPTER 1 INTRODUCTION......Page 15
THREE THEORIES......Page 16
POINT OF DEPARTURE......Page 19
AN INSTITUTIONAL EXPLANATION......Page 23
THE STRUCTURE OF THIS BOOK......Page 33
THE INSTITUTIONAL PROCESS OF GLOBALIZATION AND THE TWO STRUCTURAL SHIFTS......Page 36
COORDINATION VERSUS CONTROL AND MONITORING: THE MECHANISM OF EXCESSIVE COMPETITION......Page 43
STABILITY VERSUS ELEVATING THE ECONOMIC STRUCTURE: THE MECHANISM OF TOTAL EMPLOYMENT......Page 53
CHAPTER 3 THE RISE OF THE PRINCIPLES OF COORDINATION AND STABILITY......Page 62
THE COLLAPSE OF THE GOLD STANDARD AND THE CRISIS OF THE LAST PEAK OF GLOBALIZATION......Page 63
MAINTAINING STABILITY AND THE RISE OF THE MANDATORY CARTELS......Page 65
THE EARLY PATTERN OF TOTAL EMPLOYMENT......Page 68
DIRECT STATE CONTROL OF RESOURCE ALLOCATION......Page 70
THE DEVELOPMENT OF INDIRECT FINANCING AND THE MAIN BANK SYSTEM......Page 73
THE CONTROL ASSOCIATIONS......Page 75
THE WEAKENING CONTROL OF MANAGEMENT BY SHAREHOLDERS AND BANKS’ MONITORING OF CORPORATIONS......Page 77
THE DEVELOPMENT OF SUBCONTRACTING......Page 79
CONCLUSION......Page 81
CHAPTER 4 COORDINATION, EXCESSIVE COMPETITION, AND HIGH-SPEED ECONOMIC GROWTH......Page 82
HIGH GROWTH AND EXCESSIVE COMPETITION......Page 83
AN IMPORTANT POLICY MIX......Page 86
A STABLE SUPPLY OF INDUSTRIAL CAPITAL......Page 90
CONVOY ADMINISTRATION AND THE REDUCTION OF INVESTMENT RISKS......Page 94
MITI AND COMPETITIVE OLIGOPOLIES......Page 96
THE DEVELOPMENT OF THE KEIRETSU......Page 97
INDIRECT FINANCING......Page 100
THE MAIN BANK SYSTEM......Page 103
RECIPROCAL SHAREHOLDING......Page 106
THE ONE-SET INVESTMENT STRATEGY OF THE KEIRETSU......Page 111
PERMANENT EMPLOYMENT AND THE STRONG GROWTH ORIENTATION OF JAPANESE COMPANIES......Page 114
THE LIBERALIZATION OF TRADE AND FOREIGN INVESTMENT......Page 115
THE IMPACT OF EXCESSIVE COMPETITION ON ECONOMIES OF SCALE......Page 117
THE FAILURE OF THE NEW INDUSTRIAL SYSTEM......Page 122
THE PERSISTENCE OF THE DUAL ECONOMY......Page 123
CONCLUSION......Page 125
CHAPTER 5 STABILITY, TOTAL EMPLOYMENT, AND THE WELFARE SOCIETY......Page 128
STABILITY AND TOTAL EMPLOYMENT......Page 130
THE U.S. EFFORT TO BUILD A MULTILATERAL INTERNATIONAL TRADE REGIME, JAPAN’S STRONG DEVELOPMENTAL ORIENTATION, AND PRIVATIZED…......Page 133
ASYMMETRIC COOPERATION WITH THE UNITED STATES AND THE WELFARE SOCIETY IN JAPAN......Page 138
THE PERMANENT EMPLOYMENT SYSTEM......Page 142
THE ROLE OF CARTELS......Page 145
THE POLITICS OF PROTECTING THE WEAK......Page 151
JAPANESE WOMEN IN THE LABOR MARKET......Page 155
THE TRADEOFFS OF THE TOTAL EMPLOYMENT STRATEGY......Page 158
CONCLUSION......Page 163
CHAPTER 6 THE ROADS TO THE BUBBLE......Page 166
EXCESSIVE COMPETITION AND THE TWO BUBBLES......Page 168
THE COLLAPSE OF THE BRETTON WOODS SYSTEM......Page 171
THE DILEMMA BETWEEN A STABLE EXCHANGE RATE AND THE BALANCE OF DOMESTIC DEMAND AND SUPPLY......Page 173
THE FIRST OIL SHOCK AND THE DEPARTURE OF CORPORATE FINANCE FROM THE MAIN BANKS......Page 176
THE LIBERALIZATION OF FINANCE......Page 179
ZAI’TECH......Page 181
MULTILATERAL POLICY COOPERATION AND THE PLAZA ACCORD......Page 185
THE OVERSUPPLY OF MONEY......Page 190
THE MAEKAWA REPORT......Page 193
THE ADOPTION OF AN EXPANSIONARY FISCAL POLICY......Page 194
EQUITY FINANCE......Page 197
BANKS DURING THE BUBBLE......Page 199
THE TWIST OF TECHNOLOGICAL INNOVATION......Page 203
FROM PRODUCTION TO SERVICE......Page 207
THE BEGINNING OF DEINDUSTRIALIZATION......Page 211
CONCLUSION......Page 214
CHAPTER 7 THE STRUGGLE OF THE WELFARE SOCIETY......Page 217
THE END OF ASYMMETRIC COOPERATION......Page 220
THE END OF THE HIGH GROWTH AND BEGINNING OF DECLINING PROFITABILITY......Page 224
TWO ATTEMPTED DEPARTURES FROM THE PAST......Page 225
THE CHALLENGE TO CARTELS AND THE STATE-LED NONMARKET GOVERNING MECHANISMS......Page 230
THE EXPANSION OF GOVERNMENT PROTECTION OF INEFFICIENT SECTORS AND SUNSET INDUSTRIES......Page 234
THE TRADEOFFS BETWEEN JOB SECURITY AND WAGES......Page 240
COMPETITION POLICY IN A WELFARE SOCIETY......Page 244
THE RISE OF INEQUALITY......Page 249
CONCLUSION......Page 254
THE BURST OF THE BUBBLE......Page 257
THE DILEMMAS AMONG MULTIPLE POLICY OBJECTIVES AND THE LIQUIDITY TRAP......Page 259
STRENGTHENING BANK MONITORING......Page 263
THE EFFORTS IN TIGHTENING SHAREHOLDERS’ CONTROL OVER MANAGEMENT......Page 266
LOSING THE FOUNDATION OF TOTAL EMPLOYMENT......Page 269
SEARCHING FOR A STABLE INTERNATIONAL ENVIRONMENT......Page 273
SOME REFLECTIONS......Page 278
AN INSTITUTIONAL DIAGNOSIS OF THE STAGNATION......Page 285
REFERENCES......Page 289
INDEX......Page 308