Planning for Change: Industrial Policy and Japanese Economic Development, 1945-1990 - Softcover

Vestal, James E.

9780198290278: Planning for Change: Industrial Policy and Japanese Economic Development, 1945-1990

Softcover

ISBN 10: 0198290276 ISBN 13: 9780198290278

Publisher: Oxford University Press, USA, 1995

In addition to providing an overview of Japanese development and industrial policy measures used during the 1945-1990 period, this book assesses the contribution that industrial policy made to Japan's phenomenal economic success. James Vestal concludes that a stable, gradual, and long term perspective was key to Japan's development, rather than "picking winners." Policy makers selectively blocked competition in inefficient sectors in order to maintain employment, which was necessary given that Japan's productive capital was decimated in the war. Barriers to competition were raised as the Japanese economy became able to provide full employment at above subsistence wages. Given the enormous upheaval associated with introducing a competitive market structure, the Japanese case has important lessons for Russia and Eastern European nations today.

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Review:

extensively researched book ... Japan's industrial policy has been debated with too much passion and too little data, and this book is a conscientious effort to rectify the situation (Far Eastern Economic Review)

From the Back Cover:

What has been the role of government industrial policy in Japan's extraordinary post-war development? How has the role changed in successive phases of growth? What "lessons" can be learnt from this experience by other nations, be they in the West, or developing countries or economies in transition attempting to introduce competitive market structures? These are some of the main questions addressed in this absorbing and thorough study. Dividing the period into three main phases, the author shows that policy played a crucial role in the initial period of post-war recovery. It did so not by "picking winners" but by creating a stable base from which development could occur by spreading the cost of introducing market competition over time. In the succeeding high growth period, and more recently, Japan's industrial policy attempts only to promote the development of new technology, and smooth the decline of sectors that are no longer globally competitive. That Japan itself no longer practices industrial policy on a wide scale is an irony little appreciated by those advocating the adoption of a "Japan-style" industrial policy elsewhere.

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