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"Industrial Policy and Government Organization in Postwar Japan"(in Japanese)

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  • Tetsuji Okazaki

    (Faculty of Economics, University of Tokyo)

Abstract

In this paper we analyze the government organization and industrial policies in postwar Japan from comparative institutional perspectives. Industrial policies were drawn up and implemented under different fundamental and organizational environments from period to period. Before the Japanese economy transformed into a market economy around 1950, industries harshly competed with one another for a couple of scarce resources which were bottlenecks of production. Under this circumstance, power of the government was concentrated into the Economic Stabilization Board (ESB), which carried out the Priority Production Policy focusing on coal and steel industries. This policy contributed to recovery of the heavy industries at the expense of other industries. When industries are substitutive of one another as was the case in late 1940's Japan, horizontal coordination among the government sections in charge of those industries (genkyoku), are less effective than centralized control. In this sense, the centralized government organization with the ESB was fitted to the environment just after the war. After the transition to a market economy, macro-shocks came to be larger and complementarity among industries increased. Meanwhile, the government organization was decentralized. The process of industrial rationalization policy in early 1950's was characterized by active horizontal coordination among genkyoku not only in one ministry but also across ministries. Large macro-shocks and industrial complementarity provided the condition for effective horizontal coordination. This fundamental condition worked more forcefully in the period of high economic growth. The Five Year Plan of Economic Self-support determined in 1955 and the individual industrial policies influenced each other in an interactive manner, which, in turn, stimulated syncronized investment of the numerous private enterprises to start high economic growth.

Suggested Citation

  • Tetsuji Okazaki, 1998. ""Industrial Policy and Government Organization in Postwar Japan"(in Japanese)," CIRJE J-Series CIRJE-J-2, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:jseres:98cj02
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/98/cj2/contents.htm
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    Cited by:

    1. Sumner J. La Croix & Akihiko Kawaura, 2005. "Institutional Change in Japan: Theory, Evidence, and Reflections," Economics Study Area Working Papers 82, East-West Center, Economics Study Area.

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