Analysis of features of japans development strategy

Peoples use the phrase “ Nipponese Miracle ” to depict the economic development of Japan. It is said that even Nipponese themselves could non believe the rate of economic growing they were accomplishing in early 1960s when the mean one-year GDP growing rate was over 10 % . How Japan achieved this? And what are the alone characteristics of Japan ‘s development scheme? This essay will concentrate on taging those typical characteristics of Nipponese development theoretical account, particularly the economic development theoretical account, in its high-growth epoch ( from mid 1950s up to mid 1970s ) during which period Japan surpassed most West developed states and became the universe ‘s 2nd largest economic system after the US.

The essay is organized as follows: in the first subdivision, the writer sees the Japan ‘s development scheme from an external point of position and points out the Nipponese typical development characteristic as a ‘free-rider ‘ under the protection of the US ; in the 2nd subdivision, the writer tries to happen those alone characteristics inside Japan, such as the typical elements in the political construction, the government-firm relationship and policymaking system, from an internal point of position. A concluding subdivision concludes.


From an external position, the high-growth of Japan ‘s economic system during the period of mid 1950s to mid 1970s is a by-product of a peculiar international environment and clip — the Cold War. During this period the America turned its scheme of reforming Japan ( by leveling its military and industrial machinery that had been the foundation of the Japanese war attempt ( Stubbs,2005:66 ) ) to reconstituting its economic system with the intent of organizing a solid confederation against Communism. Thankss to the US hegemony, Japan rose quickly from the debris of the WWII to go the 2nd largest economic system in the universe. And the undermentioned three facets will give the luxuriant account.

First, Japan benefited from supplying supplies to the wars. The two “ hot wars ” in the Cold War epoch — the Korean War and the Vietnam War had a dramatic impact on the development of Nipponese economic system. Particularly the Korean War during which clip General MacArthur needed a unafraid supply line to step in in the Korean peninsula, and the Washington ‘s military scheme was to utilize Japan ‘s extra industrial capacity, close propinquity to the conflict lines and low-priced labor to back up America ‘s military run. Hence the demand for weaponries by the US military injected much-needed dollars into the Nipponese economic system and served as a accelerator for rapid economic growing. It is estimated that the sum of money that the US military spent on the procurance was about $ 2.5 billion which took for about 80 % of the entire US disbursement on war-related supplies ( Stubbs,2005:68 ) . And a general consensus is that Japan earned at least $ 1 billion per twelvemonth from the Vietnam War ( Stubbs,2005:128 ) .

Second, the US furnished Japan with a clump of economic assistance bundles. The economic assistance provided by the US included increased trade, an unfastened market, “ a fixed exchange rate of 360 hankerings per US dollar ” ( Komiya and Itoh, 1988:180 ) , and proviso of latest engineering etc. In peculiar, as Stubbs ( 2005 ) has observed, during 1960s, a figure of Nipponese heavy industries were restructured with the US aid, such as the car and ship building industries which had a durable impact on its economic system and underpinned the state ‘s ulterior economic success ; Murakami ( 1987 ) believes that crucial to the Nipponese economic success was the “ Pax Americana ” which provided spread outing markets for Nipponese industries and tolerated the closed nature of Nipponese domestic markets. As for the fixed yen-dollar exchange rate, it was favourable to Nipponese exports, and Japan benefited much from it for most of the 3rd one-fourth of twentieth century ( Inoguchi,1988:30 ) : it is notable that by early 1970s Japan ‘s trade excess with the US mounted to a important proportion — over $ 4 billion — compared with that of around $ 200 million in early 1960s ( Stubbs,2005:129 ) .

Third, under the US hegemonic umbrella, Japan saved big sums of money on military outgos. Inoguchi ( 1988 ) compared Japan ‘s military disbursement with other OECD ( Organisation for Economic Cooperation and Development ) powers and concluded that “ its disbursement is a small letter sum since the ratio of military outgos of Japan to overall authorities disbursement has been approximately 5 % and its ratio to GNP has been less than 1 % for last two decennaries [ 1950s and 1960s ] , while, other major OECDs ‘ military outgos account for about 10-30 % of entire authorities disbursement. ”

Some bookmans who portion the American-hegemony accounts of the success of the Asiatic economic systems ( Stubbs,2005:13 ) perceive Japan as a “ free-rider ” that “ flourished free from the costs and uncertainnesss of full engagement in international political and security personal businesss ” in the “ US-made international nursery ” ( Hellmann,1988:345 ) and could entirely concentrate on its economic development. I agree with them. The US offers Japan by and large a postwar political deal including security protection, engineering and an unfastened market, in return, Japan provided the US with bases for “ projecting military power in support of its regional Cold War military scheme ” ( Hughes and Fukushima,2004:60 ) , as a consequence, Japan was able to prosecute what was subsequently to be called the Yoshida Doctrine that places highest national precedence on economic development, while at the same time minimizes rearmament of any sort.


This subdivision will concentrate on measuring the typical characteristics inside Japan. “ Inside ” means that these characteristics are endogenous instead than exogenic and the province owns the enterprise to make certain sort of development theoretical accounts or schemes. This subdivision is divided into two parts with one portion emphasizes on the Nipponese manner of organisation construction of the market economic system and the other focal points on the policy pick facet.

1. Organization Structure:

This portion assesses the different functions played by the authorities, industry and governing party in policymaking and some typical characteristics in these three.

The Role of the Government

The function of authorities played in the development of Nipponese economic system is under intense argument between those advocates of “ the developmental province ” led by Chalmers Johnson who emphasize Nipponese authorities ‘s powerful function and recognition Nipponese bureaucratisms for Japan ‘s outstanding postwar economic success and those who attribute Japan ‘s success to its market-conforming scheme represented by a group of American and Nipponese economic experts such as Calder. In my sentiment, authorities intercession did important part to the rebuilding of Japan ‘s war-worn economic system particularly in the early postwar decennaries, and although it bit by bit became “ less important in the development of economic system when Japan was shuting the spread with the West ” , there is no uncertainty that province played an unreplaceable or at least an “ of import supportive function ” in the go oning industrial development of the economic system ( Gilpin,2001:164 ) .

A inquiry may originate: why the Nipponese authorities has a relatively powerful influence on the economic system compared with other market-economy-countries such as the US. Fujiwara ( 1998 ) explains the ground by stating that as a late developer, Japan had an uncomplete constitutional passage because its constitutional system was alien and exogenic, “ the separation of legislative, administrative, and judicial maps within the authorities is non sufficiently clear in Japan ” and this endowed the Nipponese authorities “ a comparatively big dickering power ” — the authorities ‘s ability to exercise its power over the private sector. He describes the type of authorities in Japan as “ relation-based “ authorities which is comparatively more effectual in active counsel, such as organizing macro resource allotment and organizing micro corporate schemes.

Since the Nipponese authorities has the a comparatively big “ bargaining power ” , it is necessary to analyse how the authorities guided the economic system by utilizing its bargaining power. And the Nipponese authorities intercession includes the following two facets:

Economic Planning

During the Liberal Democratic Party ‘s 38-year reigni??numerous economic programs were brought out by the province, such as The 1970-1975 New Economic and Social Development Plan. Economic programs may be of different lengths in Japan, but five old ages is common. The program defines the chief aims of economic policy and nowadayss macroeconomic projections for “ the GNP, ingestion, investing, authorities outgos ” , and so away. It besides may stipulate other selected ends, such as those for “ rising prices, national research disbursement, and the environment ” . Possibly much the most of import portion of the program is the general guidelines it sets for public policy ( Lippit,1975 ) .

The economic planning in Japan is considered to be mostly cosmetic because it is of the declarative, non compulsory, type. What ‘s more, some bookmans believe that economic programs serve as a tool of politicians, particularly of the Prime Minister, to profess their finding of economic development and to win support from the electors as a consequence.

However, I would wish to reason that economic planning played an of import portion in set uping this exceeding growing record. Here are the grounds: foremost, it provides chances for different sectors to portion information. The economic planning authorization is vested in the Economic Planning Agency which launched audiences with people who are representative figures in Japan ‘s economic constitution both from private and public sectors to pull up a program. Therefore, “ those in the private sector who participate in the planning procedure learn about the purposes of the populace sector and of other industries, while those in the populace sector learn about complementary activities planned by other authorities bureaus and private sector purposes ” ( Lippit,1975 ) . Second, this declarative planning undertakings a future image of economic construction and activity that will steer private determinations. Though non compulsory, those programs have an “ advertisement consequence ” that indicates the authorities support to certain industries. As Lippit has asserted, instead than to stipulate marks for it, declarative planning seeks to spur the private sector.

Industrial Policy

Industrial Policy refers to consider attempts of the authorities to advance industrial development and, farther, to steer the overall construction of the economic system. The aim of industrial policy was to switch resources to specific industries to derive international competitory advantage. During the high-growth epoch, particularly in the early postwar decennaries, industrial policy played a major function in the rebuilding of the war-worn economic system by supplying authorities support for favorite industries, particularly for heavy industries such as Fe and steel, electric power, machine industries in general, and chemicals all of which laid the footing for the ulterior development of Nipponese economic system. The Nipponese authorities supported those promising industries through trade protection, subsidies, proviso of low-priced funding and other agencies such as the institutionalization of some authorities counsel. As for those worsening industries, the authorities besides supported creative activity of trusts ( keiretsu ) to assist them and to extinguish inordinate competition.

Among all those agencies, as Johnson ( 1982 ) has noticed, the most of import instrument of Japan ‘s successful industrial policy was the device of “ administrative counsel by administrative officials ” , which was utilized to “ promote and sometimes coerce private houses to put in those industrial and hi-tech sectors characterized by high value-added and favored by the authorities ” ( Gilpin,2001 ) .Influence, prestigiousness, advice, and persuasion are used to promote both corporations and persons to work in waies judged desirable.

The best illustration for the Nipponese authorities intercession theoretical account should be the Ministry of International Trade and Industry ( MITI ) .Johnson ( 1982 ) first codifies the Nipponese authorities theoretical account into his book-MITI and the Nipponese Miracle in which he credits Nipponese authorities intercession and the authorities ‘s industrial policy with holding orchestrated postwar economic and technological success. And as the main formulator of industrial policies, the MITI was identified as the accelerator for the Nipponese miracle. As a really active participant in the authorities intercession, MITI made and implemented 23 industrial policies covering about all favorite industries of that clip merely in 5 old ages ( 1953 -1958 ) ( Wang,2001 ) . Johnson besides argues that monolithic displacements occurred in Japan ‘s industrial construction in 1950s and 1960s was due to the MITI intercession: “ between the first half of the 1950s and the first half of the sixtiess, five-spots and fabrics declined from 30 % of exports to 8 % , while machinery increased from 14 % of exports to 39 % ” ( Poter,2000:20 ) .

There are several features of the authorities intercession of 1950s and 1960s demand to indicate out: 1 ) authorities intercession was moderate. As one may hold noticed, during this period, the Nipponese authorities ever tried to steer instead than to command or govern the economic system. Most of the industrial policies, economic programs and administrative counsels were non compulsory but declarative, in other words, the corporations in Japan have their ain enterprise and liberty ( more item will be provided in the following subdivision ) . 2 ) Bureaucracy Easts policymaking. It is normally recognized that the politicians had a really limited power in policymaking and some bookmans even see the primary map of politicians as merely moving as a “ safety valve ” for bureaucratism, “ dissing it from political and involvement group force per unit areas so that it could autonomously transport out the chief undertaking of the developmental province — economic growing ” ( Muramatsu and Krauss, 1987:516 ) . 3 ) Government intercession was selective and chiefly focused on peculiar industries with market malfunction jobs. For illustration, the authorities turned to particular Torahs and ordinances to extinguish inordinate competitions in natural stuff industry when market mechanism did non map good, while as to treating industry, it preferred to function as a supportive function to steer the market by merely supplying nonobligatory counsels ( Zhang,2000 ) .

The Role of Private Sectors

In his book Strategic Capitalism, Calder ( 1993 ) attaches great importance to the private sectors in the development of the Nipponese economic system. He doubts the intercession ability of the province and asserts that “ private-sector enterprises have had well more range to manner Japan ‘s industrial hereafter than frequently realized ” . And he gives two grounds it is the private sector that define strategic long term ends in those successful industries such as consumer electronics, fabric and petrochemicals ; and it is besides the private industry and banking that generate the initial demands for recognition and the earliest proposals for investing in Japan and do the determinations to come in new sectors instead than the administrative officials or politicians. One illustration implicating the enterprise of private sector is the rejection made by the car industry to the MITI ‘s policies that encouraged amalgamations in order to better the industry ‘s international fight in 1960s. And the car industry of Japan turned out to be really successful from early 1970s.

There is no uncertainty that the authorities ‘s support to certain industries through trade protection, generous subsidies and other agencies contributes to the high adaptability and fight of some Nipponese corporations or industries ( as mentioned in last subdivision ) , while, the alone Nipponese manners of industrial organisation, corporate finance and industrial dealingss besides can be attributed to the success of Nipponese economic system before 1980s although “ its typical characteristics have been undergoing of import alterations due to the maturing of the Nipponese economic system and to the economic stagnancy in the late ninetiess ” ( Gilpin,2001 ) .

Nipponese manner of industrial organisation is represented by keiretsu system. With a major bank at the bosom ( the chief bank system which will be discussed subsequently ) , a group of houses forms a extremely efficient and rational mechanism for forming economic activities. The keiretsu is a set of companies whose are bound together by common trust and long-run concern relationships and shareholdings. This sort of concern group originates from the prewar zaibatsu — big family-controlled perpendicular monopolies that controlled the prewar Nipponese industry. There are horizontal keiretsu — endeavor groups that are composed of a major bank and other member houses interlinked through portion purchases to organize horizontally-integrated confederations across many industries, such as Mitsubishi and Sanwa and perpendicular keiretsu that composed of “ a dominant or parent fabrication company and a big web of subcontractors and providers ” like Sony and Honda ( Gilpin,2001:166 ) .

The keiretsu theoretical account benefits the Nipponese economic system due to the undermentioned grounds: foremost, the portion of sole information between parent house and its affiliates enhances the efficiency ; secondly, the keiretsu serves as a successful pioneer of new merchandises and techniques since its immense internal resources and long-run position ; furthermore, cross-shareholdings among members exclude “ foreigners ” while protect relatively little graduated table corporations every bit good as consolidate confederation of “ insiders ” and do it a strong rival in universe market as a consequence ; moreover, common trust between the members well reduces dealing costs and the chief bank system minimizes the presence of hostile coup d’etats in Japan.

Nipponese manner of corporate finance — the chief bank system is a typical institutional characteristic of capital market organisation. The “ financial-cum-managerial system ” represented by the chief bank system is one of the chief factors behind the successful public presentation of the Nipponese economic system. The chief bank system originated from the wartime in 1940s with the intent of supervising the corporate finance, every bit good as conserving on the costs of scrutinizing corporate public presentation ( Song,2000 ) . Hoshi ‘s ( 1994 ) work echoes back to this thought, as he observes that “ the deficiency of committedness by the Nipponese authorities… to interrupt up the close bank-firm ties ensured that many facets of wartime corporate finance, which is characterized by a concentration of banking industry, a higher dependance on bank adoptions, the development and avowal of close bank-firm ties… were carried over to the post-war period. ” And all these characteristics led to the “ creative activity of the paradigm of the chief bank system ” . The map of the chief bank system covers the undermentioned facets. First, the chief bank supplies recognition and provides the bulk loans to the house. Second, the chief bank dramas as a chief stockholder in the house and it closely involved in the concern by testing and supervising the house and sharing the information with the house as an “ insider ” . Last point to do is that the chief bank will “ look after ” the house should it incur fiscal troubles such as bankruptcy, during which clip the bank will direct its ain executives to “ oversee the rationalisation from within the house or to take control of the direction of the house ” ( Sheard,1989 ) .

The successful public presentation of the Nipponese economic system justifies that the “ financial-cum-managerial system ” represented by the chief bank system is the best pick for the “ catch-up scheme ” since it brings extremely efficient distribution of capital, reduces the bureau costs of supervising corporate public presentation, helps to avoid the jobs of information imperfectness and lowers the restructuring costs of the house in times of fiscal hurt under a peculiar circumstance of high macroeconomic volatility and information dissymmetries during the post-war epoch. In short, the chief bank system has been the “ chief pillar of corporate monitoring and administration, counterbalancing for the deficiency of more arm’s-length market-oriented agencies such as the coup d’etat mechanism, and likely rid ofing a demand for them to develop ” ( Aoki. 1995 ) .

The keiretsu is an external facet of Nipponese corporate theoretical account, and internally, the alone Nipponese corporate civilization generates a alone relationship between Nipponese employees and their corporations. As Gilpin ( 2001:165 ) has observed “ American houses emphasize safeguarding the profitableness and involvements of stockholders, while Nipponese houses have considered their primary duty to be toward the house ‘s stakeholders — its employees and subcontractors ” . Some writers explain this phenomenon by mentioning to the alone Nipponese civilization that emphasizes “ people ” — anthropocentricism or peoplism, and “ community ” — ” Internet Explorer ” . And this peoplism gives concrete look in the signifier of “ employee sovereignty ” ( Sakakibara, 1993:4 ) or “ stakeholder & gt ; stockholder ” within the corporation. In contrast to this cultural account, some economic experts prefer economic accounts that may be summarized as the “ latecomer thesis ” . As a latecomer in industrialisation, Japan was able to take advantage of the latest engineerings without bearing development costs. At the same clip, nevertheless, Nipponese endeavors had to develop the work force needed for freshly introduced engineering rapidly ( Shimada,1992:270 ) .

In my sentiment, these two accounts are complementary and could explicate this alone system. What ‘s more of import is that the Nipponese employees working in Japan ‘s big corporations have enjoyed lifetime employment, have been paid on the footing of senior status, have received fillips and retirement allowances and have been considered stakeholders to whom Nipponese houses have a societal duty. One advantage of this system has been that because lifetime workers are considered “ long term assets ” , Nipponese houses have a strong inducement to put in labourers ‘ accomplishments ( Gilpin,2001:165 ) . And another advantage is that workers have a really strong squad spirit and trueness to the house since they view it as their community or household that they will work for all of their life.

The Role of the Political Party

Though compared with the administrative officials, the power of politicians in the policy-making procedure of Japan is limited or even negligible as Karel new wave Wolferen ( 1993 ) has described in his article: “ politicians without power… LDP abdicated duty for the national docket to the bureaucratism, semi-independent government organic structures… ” This essay does non take the point of view of the “ dominant bureaucratism ” school and fundamentally agrees with the point of view that politicians and administrative officials interact with each other in the policy-making procedure. And the LDP played a supportive function in helping the industrialisation.

The LDP authorities held the longest endurance record ( 38 old ages ) of any post war political party in an advanced capitalist industrial society ( Murakami,1982:65,66 ) get downing from 1955 until the split of party in 1993 ( Godement,1997:176 ) . Although Japan is a state with bipartisan system, LDP laterality continued throughout about for four decennaries, outweighing the support for all other parties combined. The longtime laterality of the conservative cantonment stabilized the consistence of policymaking and the national ends — ” catching up with the West ” . Even though the switch of party leading happened all the clip, this alternations of leading inside LDP did non consequence the overall policymaking of the party and the national scheme of “ economic system precedence ” was still overruling ( Song,1994 ) .


As described above, the bureaucry, political party and the market all participate in the Nipponese economic policymaking. Some bookmans offers the term “ Fe trigon ” to depict the three-in-one combination of the LDP, the economic ministries and the zaikai — large concern groups, and see this “ three ” as the premier mover of advanced industrialisation in the high growing period. These three are engaged in a “ tug-of-war for their ain involvements ” — the politicians want re-election and seek to prehend support from the administrative officials and concern groups, the administrative officials want bigger budgets from the governing party and Big Business want protection, subsidies, and freedom from the other two groups ‘ tampering. However the functions played by the three in policymaking are different, and there are some arguments on this issue. Some bookmans characterize this system, by utilizing the impression of “ patterned pluralism ” , as a combination of a pluralistic system ( market and parliament ) and administrative intercession ( bureaucratism ) with the bureaucratism playing a prima function in determination devising ( Murakami,1987:71 ) ; other attach importance to the bureaucratism and private sectors while position the LDP which depended on “ bureaucratic endowment and concern fund ” play a auxiliary function ( Masumi,1988 ) .

However, in my sentiment, this is less than accurate. I prefer to utilize Aoki ‘s ( 1988 ) “ bureau-pluralism ” to depict the Nipponese economic development theoretical account. The difference between the “ bureau-pluralism ” construct and the “ Fe trigon ” construct is that the former takes notice of the assorted societal groups in add-on to large concerns, such as little concern groups and husbandmans, in policymaking system. It does non deny the taking functions played by the bureaucratism and the supportive function of zaikai every bit good as the auxiliary function of the political parties in the policymaking of Nipponese economic system, and these three are utilizing this system to carry through their opportunisms, what it suggests is a more decentralised system as the power of determination devising is besides in the manus of people from different societal groups. In the bureau-pluralistic province, “ private involvements are chiefly aggregated into an industrial association and so transmitted to its opposite number in the bureaucratism, viz. the ‘original agency ‘ which is in charge of the industry. ” The original agency deals inside the authorities, “ stand foring the involvements of the industry under its legal power ” ( Okazaki,2001:324 ) .

The bureau-pluralistic nature of Japan ‘s political economic system is reflected in the deliberative council system. The deliberative councils in Japan serve as consultative organic structure of the authorities to organize economic growing in the 1950s and the high-growth epoch. Its members include the representatives of industrial associations, representatives of societal organisations and other economic experts ( Song,2000 ) . One major advantage of this system is that local information scattered around the industries can be incorporated rapidly into authorities policy, and power of determination devising is distributed to each agency which represented the involvements of an industry and the private sectors.

2. Policy Choice:

This portion amplifies three schemes which the writer believes to be most of import to the development of Nipponese economic system.

Export-oriented Strategy

The Nipponese authorities was obsessed with the construct that Japan as a little state with no natural resources, could non last merely by bring forthing exportable goods ( Poter,2000:22 ) . “ Export or decease ” was the most popular motto in 1950s and 1960s. Japan had to advance exports zealously and at the same clip, restrict imports in order to equilibrate its international payment. Therefore comes the “ Promotion of trade scheme ” which was the first pillar of the trade policy system from the 1950s to the late sixtiess. Exports were promoted by such policy steps as subsidies, proviso of low-interest loans for assuring export industries, and discriminatory revenue enhancement intervention of income for geographic expedition of new export markets ( Komiya and Itoh, 1988:176 ) . Furthermore, the significant overestimate of yen ( exchange rate of 360 hankerings to the dollar set in 1949 versus 170 hankering to the dollar antecedently ) besides played an of import function in bolstering exports during that period.

Take the stitching machine industry as an illustration, it was promoted as an export industry instantly following the WWII. The authorities made great attempt to back up the industry by offering extra inducements for its makers to apportion production for export and moving as a trading company to advance Nipponese run uping industry abroad, even though the domestic market was turning quickly.

Restriction of Foreign Direct Investment

Strict limitations on foreign direct investing and “ backbreaking regulations regulating local ownership besides deterred foreign companies from come ining the Japan ‘s market ” . Because the authorities believed the baby industries and “ industries with high spillover effects to other industries ” need to be protected. One illustration is in the detergent industry, the authorities prohibited foreign ownership of Nipponese corporations throughout the 1950s and 1960s. And “ it as non until 1970 that the authorities allowed 50-50 joint ventures ” ( Poter,2000:24 ) . Other industries with drawn-out protection included cars, computing machine and exposure movie. However, the gradual liberalisation of those limitations was under manner from mid1950s until early 1970s.

Technological Promotion Policy

Nipponese engineering policy could be traced back from the Meiji Restoration of 1868 with the intent of exciting the growing of fabrication industry. The policy contains two major facets: import of the Western engineering and engineering invention. As Freeman ( 1987:32 ) has noticed, “ [ Nipponese engineering policy included ] intense attempts to import and whenever possible to better upon the best available engineering in the universe ” . Whereas in its early old ages of high grow epoch, Japan adopted the export-led scheme and at the same time restricted import of foreign goods, as mentioned above, Japan zealously imported Western engineering because it is the most efficient manner to reconstruct and develop its economic system in early postwar period and besides because it creates new comparative advantage of Japan in 1970s when more and more Nipponese industries had caught up with the Western degree of productive efficiency.

It is notable that a strong drift from the authorities ( i.e. , MITI ) to advance technological development and modernisation of Nipponese economic system. Equally early as 1950s, Nipponese authorities saw it was their duty to promote the debut of advanced engineering through new investing as the 1952 Enterprises Rationalization Promotion Law ( Freeman,1987:35 ) provided direct authorities subsidies for the installing and operation of new machines and equipment, since during the 1950s and 1960s, the basic end of economic policy was to promote corporations ( chiefly were heavy industries ) to follow progressively big and efficient graduated tables of production. By the late sixtiess and early 1970s, particularly after the oil crisis of 1973, the authorities realized that the form of Japan ‘s comparative advantage demand to switch from the former one ( chiefly in labor-intensive merchandises ) toward “ processing and assembling-type fabrication industries that depend on mass-production methods and medium to high engineerings ” ( such as cars and communicating installations ) instead than natural resources and cheap labor ( Komiya and Itoh, 1987:213 ) as a agency of prolonging economic public presentation. In the 1970s, the authorities began aiming hi-tech industries to guarantee than Japan would be at the head of technological development where fiscal wagess ere believed to be the highest.

What Japan has achieved due to its engineering policy are: technological reserve created Japan ‘s alone system of low-priced mass production ; besides, during the 15 old ages from 1955 to 1970, it is said that Japan has imported and attained about all the universe most advanced engineerings of that clip which took about half a century for other states to develop, this saved for Japan for at least 20 old ages to catch up with the developed states. What ‘s atom, by the terminal of 1970s, Japan has lead the universe in a farily broad scope of sophisticated fabricating industries such as steel production, car and family electric contraptions ( Wang, Du and Li, 2006 ) .


This essay analyses the chief characteristics of Japan ‘s economic development in its high-growth epoch. The writer divides the essay into two subdivisions by measuring these characteristics from two positions: internal and external positions.

From an external point of position, in the first subdivision, the writer points out that the US ‘s influence contributes to the Nipponese economic success since the US liberally provided economic AIDSs to Japan with the intent of beef uping their confederation.

In the 2nd subdivision, the writer credits several endogenous elements to the development of Nipponese economic system from an internal position. The writer farther divided this subdivision into two parts: organisation construction and policy pick.

The organisation construction portion assesses the different functions played by the authorities, industry and governing party in policymaking and the relationships among the three, so the writer makes a decision that the construct of “ bureau-pluralism ” can outdo qualify the alone Nipponese system in which the administrative officials plays as a prima function in determination devising while the concern groups and politicians serve as a supportive function, furthermore, in Japan, the administrative officials besides represent the involvements of the people which means that it is the people, non merely the minority with a high societal position, that participate in policymaking and do determination for the province. In this subdivision, the writer besides points out several other alone characteristics in the economic development of Japan during this clip such as the moderate and selective authorities intercession, long-run dominance of the LDP every bit good as the Nipponese manner of corporate system including the keiretsu system, chief bank system and besides the peoplism in Nipponese corporate civilization. The policy pick portion amplifies three schemes which the writer believes to be most of import to the development of its economic system. These three are export-led scheme, foreign direct investing limitation and technological betterment and invention.