Structural Adjustment Policy in Japan
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Publication date: 2005-04-30
GNPJE 2005;199(4):53-71
The article, inspired by the ideas of the “public choice” movement, refers to the experiences of Japan from the late 1950s until the early ‘70s. The author describes a network of natural and institutional limitations that contributed to the unprecedented socioeconomic advancement of this country in the first decades after World War II. The article stresses the importance of institutions regulating the relationship between the economic administration and large businesses. In Japan, these contacts contributed to an impressive increase in production, making the country a standout example of constructive cooperation between the government and business. Cooperation between the business community and the government administration was promoted by the state’s control of foreign currency and savings deposits after the war. Communication between key economic ministries and business executives took place through a well-developed system of official institutions including mediation and various informal procedures, with a limited use of legal instruments. This helped prevent widespread corruption and state intervention, which usually spoil the market mechanism and negatively affect the allocation of resources. Limitations imposed on the behavior of Japanese businesspeople and officials by personal ties, shared values and responsibility also played an important role.
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