An Analysis Of The Main Features Of Japan Economics Essay
【Abstract】People use the phrase "Japanese Miracle" to describe the economic development of Japan. This essay will focus on marking those distinctive features of Japanese economic development model in its high-growth era(from mid 1950s up to mid 1970s).The author divides the essay into two sections by assessing these features from two perspectives: internal and external perspectives. From an external point of view, the author points out that the US's influence contributes to the Japanese economic success; from an internal perspective, the success of Japanese economy of that time lies in a"bureau-pluralistic"organization structure and other distinctive features related to the organization structure such as keiretsu system, main bank system and peoplism in corporate culture are also discussed, moreover, particular policy choices also contributes to the economic development and these include export-oriented strategy, restriction of FDI and promotion of technology.
【Key Words】Japan; economic development; strategy; high-growth era;
People use the phrase "Japanese Miracle" to describe the economic development of Japan. It is said that even Japanese themselves could not believe the rate of economic growth they were achieving in early 1960s when the average annual GDP growth rate was over 10% . How Japan achieved this? And what are the unique features of Japan's development strategy? This essay will focus on marking those distinctive features of Japanese development model, especially the economic development model, in its high-growth era(from mid 1950s up to mid 1970s) during which period Japan surpassed most West developed countries and became the world's second largest economy after the US.
The essay is organized as follows: in the first section, the author sees the Japan's development strategy from an external point of view and points out the Japanese distinctive development feature as a 'free-rider' under the protection of the US; in the second section, the author tries to find those unique features inside Japan, such as the distinctive elements in the political structure, the government-firm relationship and policymaking system, from an internal point of view. A final section concludes.
I. EXTERNAL POINT OF VIEW:JAPAN AS A ' FREE-RIDER'
From an external perspective, the high-growth of Japan’s economy during the period of mid 1950s to mid 1970s is a byproduct of a particular international environment and time--the Cold War. During this period the America turned its strategy of reforming Japan(by dismantling its military and industrial machinery that had been the foundation of the Japanese war effort (Stubbs,2005:66)) to restructuring its economy with the purpose of forming a solid alliance against Communism. Thanks to the US hegemony, Japan rose rapidly from the rubble of the WWII to become the second largest economy in the world. And the following three aspects will give the elaborate explanation.
Firstly, Japan benefited from providing supplies to the wars. The two "hot wars" in the Cold War era--the Korean War and the Vietnam War had a dramatic impact on the development of Japanese economy. Especially the Korean War during which time General MacArthur needed a secure supply line to intervene in the Korean peninsula, and the Washington's military strategy was to use Japan's excess industrial capacity, close proximity to the battle lines and low-cost labour to support America's military campaign. Hence the need for munitions by the US military injected much-needed dollars into the Japanese economy and served as a catalyst for rapid economic growth. It is estimated that the amount of money that the US military spent on the procurement was around $2.5 billion which took for almost 80% of the total US spending on war-related supplies (Stubbs,2005:68). And a general consensus is that Japan earned at least $1 billion per year from the Vietnam War (Stubbs,2005:128).
Secondly, the US furnished Japan with a bunch of economic aid packages. The economic aid provided by the US included increased trade, an open market, "a fixed exchange rate of 360 yen per US dollar"(Komiya and Itoh, 1988:180), and provision of latest technology etc. In particular, as Stubbs(2005) has observed, during 1960s, a number of Japanese heavy industries were restructured with the US help,such as the automobile and shipbuilding industries which had a long-lasting impact on its economy and underpinned the country's later economic success; Murakami(1987) believes that crucial to the Japanese economic success was the "Pax Americana" which provided expanding markets for Japanese industries and tolerated the closed nature of Japanese domestic markets. As for the fixed yen-dollar exchange rate, it was favorable to Japanese exports, and Japan benefited much from it for most of the third quarter of 20th century (Inoguchi,1988:30):it is noteworthy that by early 1970s Japan's trade surplus with the US mounted to a significant proportion--over $4 billion--compared with that of around $200 million in early 1960s(Stubbs,2005:129).
Thirdly, under the US hegemonic umbrella, Japan saved large amounts of money on military expenditures. Inoguchi(1988) compared Japan's military spending with other OECD(Organisation for Economic Cooperation and Development) powers and concluded that "its spending is a minuscule amount since the ratio of military expenditures of Japan to overall government spending has been about 5% and its ratio to GNP has been less than 1% for last two decades[1950s and 1960s], while, other major OECDs' military expenditures account for approximately 10-30% of total government spending."
Some scholars who share the American-hegemony explanations of the success of the Asian economies(Stubbs,2005:13) perceive Japan as a "free-rider" that "flourished free from the costs and uncertainties of full participation in international political and security affairs" in the "US-made international greenhouse"(Hellmann,1988:345) and could wholly focus on its economic development. I agree with them. The US offers Japan generally a postwar political bargain including security protection, technology and an open market, in return, Japan provided the US with bases for "projecting military power in support of its regional Cold War military strategy"(Hughes and Fukushima,2004:60), as a result, Japan was able to pursue what was later to be called the Yoshida Doctrine that places highest national priority on economic development, while simultaneously minimizes rearmament of any kind.
II. INTERNAL POINT OF VIEW: JAPANESE STYLES OF ORGANIZATION STRUCTURE AND POLICY CHOICE
This section will focus on assessing the distinctive features inside Japan. "Inside" means that these features are endogenous rather than exogenous and the state owns the initiative to create certain kind of development models or strategies. This section is divided into two parts with one part emphasizes on the Japanese style of organization structure of the market economy and the other focuses on the policy choice aspect.
1. Organization Structure:
This part assesses the different roles played by the government, industry and ruling party in policymaking and some distinctive features in these three.
The Role of the Government
The role of government played in the development of Japanese economy is under intense debate between those proponents of "the developmental state" led by Chalmers Johnson who emphasize Japanese government's powerful role and credit Japanese bureaucracies for Japan's outstanding postwar economic success and those who attribute Japan's success to its market-conforming strategy represented by a group of American and Japanese economists such as Calder. In my opinion, government intervention did significant contribution to the rebuilding of Japan's war-torn economy especially in the early postwar decades, and although it gradually became "less significant in the development of economy when Japan was closing the gap with the West", there is no doubt that state played an irreplaceable or at least an "important supportive role" in the continuing industrial evolution of the economy (Gilpin,2001:164).
A question may arise: why the Japanese government has a comparatively powerful influence on the economy compared with other market-economy-countries such as the US. Fujiwara(1998) explains the reason by saying that as a late developer, Japan had an incomplete constitutional transition because its constitutional system was exotic and exogenous, “the separation of legislative, administrative, and judicial functions within the government is not sufficiently clear in Japan" and this endowed the Japanese government "a relatively large bargaining power" --the government's ability to exert its power over the private sector. He describes the type of government in Japan as “relation-based ”government which is relatively more effective in active guidance, such as coordinating macro resource allocation and coordinating micro corporate strategies.
Since the Japanese government has the a relatively large "bargaining power", it is necessary to analyze how the government guided the economy by using its bargaining power. And the Japanese government intervention includes the following two aspects:
During the Liberal Democratic Party's 38-year reign，numerous economic plans were brought out by the state, such as The 1970-1975 New Economic and Social Development Plan. Economic plans may be of different lengths in Japan, but five years is common. The plan defines the principal objectives of economic policy and presents macroeconomic projections for "the GNP, consumption, investment, government expenditures", and so forth. It also may specify other selected goals, such as those for "inflation, national research spending, and the environment". Perhaps much the most important part of the plan is the general guidelines it sets for public policy(Lippit,1975).
The economic planning in Japan is considered to be largely decorative because it is of the indicative, not mandatory, type. What's more, some scholars believe that economic plans serve as a tool of politicians, especially of the Prime Minister, to profess their determination of economic development and to win support from the voters as a result.
However, I would like to argue that economic planning played an important part in establishing this exceptional growth record. Here are the reasons: firstly, it provides opportunities for different sectors to share information. The economic planning authority is vested in the Economic Planning Agency which launched consultations with people who are representative figures in Japan's economic establishment both from private and public sectors to draw up a plan. Therefore, "those in the private sector who participate in the planning process learn about the intentions of the public sector and of other industries, while those in the public sector learn about complementary activities planned by other government agencies and private sector intentions"(Lippit,1975). Secondly, this indicative planning projects a future image of economic structure and activity that will guide private decisions. Though not mandatory, those plans have an "advertising effect" that indicates the government support to certain industries. As Lippit has asserted, rather than to specify targets for it, indicative planning seeks to spur the private sector.
Industrial Policy refers to deliberate efforts of the government to promote industrial development and, further, to guide the overall structure of the economy. The objective of industrial policy was to shift resources to specific industries to gain international competitive advantage. During the high-growth era, especially in the early postwar decades, industrial policy played a major role in the rebuilding of the war-torn economy by providing government support for favored industries, especially for heavy industries such as iron and steel, electric power, machine industries in general, and chemicals all of which laid the basis for the later development of Japanese economy. The Japanese government supported those promising industries through trade protection, subsidies, provision of low-cost financing and other means such as the institutionalization of some government guidance. As for those declining industries, the government also supported creation of cartels(keiretsu) to help them and to eliminate excessive competition.
Among all those means, as Johnson(1982) has noticed, the most important instrument of Japan's successful industrial policy was the device of "administrative guidance by bureaucrats", which was utilized to "encourage and sometimes pressure private firms to invest in those industrial and high-tech sectors characterized by high value-added and favored by the government"(Gilpin,2001).Influence, prestige, advice, and persuasion are used to encourage both corporations and individuals to work in directions judged desirable.
The best example for the Japanese government intervention model should be the Ministry of International Trade and Industry (MITI).Johnson(1982) first codifies the Japanese government model into his book-MITI and the Japanese Miracle in which he credits Japanese government intervention and the government's industrial policy with having orchestrated postwar economic and technological success. And as the chief formulator of industrial policies, the MITI was identified as the catalyst for the Japanese miracle. As a very active participant in the government intervention, MITI made and implemented 23 industrial policies covering almost all favored industries of that time only in 5 years (1953 -1958)(Wang,2001). Johnson also argues that massive shifts occurred in Japan's industrial structure in 1950s and 1960s was due to the MITI intervention: “between the first half of the 1950s and the first half of the 1960s, fivers and textiles declined from 30% of exports to 8%,while machinery increased from 14% of exports to 39%"(Poter,2000:20).
There are several characteristics of the government intervention of 1950s and 1960s need to point out: 1) government intervention was moderate. As one may have noticed, during this period, the Japanese government always tried to guide rather than to control or rule the economy. Most of the industrial policies, economic plans and administrative guidances were not mandatory but indicative, in other words, the corporations in Japan have their own initiative and autonomy (more detail will be provided in the next section). 2) Bureaucracy orients policymaking. It is commonly recognized that the politicians had a very limited power in policymaking and some scholars even see the primary function of politicians as just acting as a "safety valve" for bureaucracy, "insulting it from political and interest group pressures so that it could autonomously carry out the main task of the developmental state--economic growth"(Muramatsu and Krauss, 1987:516). 3) Government intervention was selective and mainly focused on particular industries with market malfunction problems. For example, the government turned to special laws and regulations to eliminate excessive competitions in raw material industry when market mechanism did not function well, while as to processing industry, it preferred to serve as a supportive role to guide the market by only providing nonmandatory guidances(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 Japanese economy. He doubts the intervention ability of the state and asserts that "private-sector initiatives have had considerably more scope to fashion Japan's industrial future than often realized". And he gives two reasons it is the private sector that define strategic long term goals in those successful industries such as consumer electronics, textile and petrochemicals; and it is also the private industry and banking that generate the initial demands for credit and the earliest proposals for investment in Japan and make the decisions to enter new sectors rather than the bureaucrats or politicians. One example implicating the initiative of private sector is the rejection made by the automobile industry to the MITI's policies that encouraged mergers in order to improve the industry's international competitiveness in 1960s. And the automobile industry of Japan turned out to be very successful from early 1970s.
There is no doubt that the government's support to certain industries through trade protection, generous subsidies and other means contributes to the high adaptability and competitiveness of some Japanese corporations or industries(as mentioned in last section), while, the unique Japanese styles of industrial organization, corporate finance and industrial relations also can be attributed to the success of Japanese economy before 1980s although "its distinctive features have been undergoing important changes due to the maturing of the Japanese economy and to the economic stagnation in the late 1990s"(Gilpin,2001) .
Japanese style of industrial organization is represented by keiretsu system. With a major bank at the heart(the main bank system which will be discussed later), a group of firms forms a highly efficient and rational mechanism for organizing economic activities. The keiretsu is a set of companies whose are bound together by mutual trust and long-term business relationships and shareholdings. This kind of business group originates from the prewar zaibatsu--large family-controlled vertical monopolies that controlled the prewar Japanese industry. There are horizontal keiretsu--enterprise groups that are composed of a major bank and other member firms interlinked through share purchases to form horizontally-integrated alliances across many industries, such as Mitsubishi and Sanwa and vertical keiretsu that composed of "a dominant or parent manufacturing company and a large network of subcontractors and suppliers" like Sony and Honda(Gilpin,2001:166).
The keiretsu model benefits the Japanese economy due to the following reasons: firstly, the share of exclusive information between parent firm and its affiliates enhances the efficiency; secondly, the keiretsu serves as a successful innovator of new products and techniques since its immense internal resources and long-term perspective; moreover, cross-shareholdings among members exclude "outsiders" while protect comparatively small scale corporations as well as consolidate alliance of "insiders" and make it a strong competitor in world market as a result; furthermore, mutual trust between the members substantially reduces transaction costs and the main bank system minimizes the presence of hostile takeovers in Japan.
Japanese style of corporate finance--the main bank system is a distinctive institutional feature of capital market organization. The "financial-cum-managerial system" represented by the main bank system is one of the main factors behind the successful performance of the Japanese economy. The main bank system originated from the wartime in 1940s with the purpose of monitoring the corporate finance, as well as economizing on the costs of auditing corporate performance (Song,2000). Hoshi's (1994) work echoes back to this idea, as he observes that "the lack of commitment by the Japanese government...to break up the close bank-firm ties ensured that many aspects of wartime corporate finance, which is characterized by a concentration of banking industry, a higher dependence on bank borrowings, the development and affirmation of close bank-firm ties...were carried over to the post-war period." And all these features led to the "creation of the prototype of the main bank system". The function of the main bank system covers the following aspects. First, the main bank supplies credit and provides the majority loans to the firm. Second, the main bank plays as a principal shareholder in the firm and it closely involved in the business by screening and monitoring the firm and sharing the information with the firm as an "insider”. Last point to make is that the main bank will "look after" the firm should it incur financial difficulties such as bankruptcy, during which time the bank will send its own executives to "supervise the rationalization from within the firm or to take control of the management of the firm"(Sheard,1989).
The successful performance of the Japanese economy justifies that the "financial-cum-managerial system" represented by the main bank system is the best choice for the "catch-up strategy" since it brings highly efficient distribution of capital, reduces the agency costs of monitoring corporate performance, helps to avoid the problems of information imperfection and lowers the restructuring costs of the firm in times of financial distress under a particular circumstance of high macroeconomic volatility and information asymmetries during the post-war era. In short, the main bank system has been the "main pillar of corporate monitoring and governance, compensating for the lack of more arm's-length market-oriented means such as the takeover mechanism, and probably obviating a need for them to develop"(Aoki. 1995).
The keiretsu is an external aspect of Japanese corporate model, and internally, the unique Japanese corporate culture generates a unique relationship between Japanese employees and their corporations. As Gilpin (2001:165) has observed "American firms emphasize safeguarding the profitability and interests of shareholders, while Japanese firms have considered their primary responsibility to be toward the firm's stakeholders--its employees and subcontractors". Some authors explain this phenomenon by referring to the unique Japanese culture that emphasizes "people"--anthropocentricism or peoplism, and "community"--"ie". And this peoplism gives concrete expression in the form of "employee sovereignty"(Sakakibara, 1993:4)or “stakeholder >shareholder" within the corporation. In contrast to this cultural explanation, some economists prefer economic explanations that may be summarized as the "latecomer thesis". As a latecomer in industrialization, Japan was able to take advantage of the latest technologies without bearing development costs. At the same time, however, Japanese enterprises had to train the work force needed for newly introduced technology quickly (Shimada,1992:270).
In my opinion, these two explanations are complementary and could explain this unique system. What's more important is that the Japanese employees working in Japan's large corporations have enjoyed lifetime employment, have been paid on the basis of seniority, have received bonuses and retirement allowances and have been considered stakeholders to whom Japanese firms have a social responsibility. One advantage of this system has been that because lifetime workers are considered "long term assets", Japanese firms have a strong incentive to invest in laborers' skills (Gilpin,2001:165). And another advantage is that workers have a very strong team spirit and loyalty to the firm since they view it as their community or family that they will work for all of their life.
The Role of the Political Party
Though compared with the bureaucrats, the power of politicians in the policy-making process of Japan is limited or even negligible as Karel van Wolferen(1993) has described in his article: “politicians without power...LDP abdicated responsibility for the national agenda to the bureaucracy, semi-independent governing bodies..." This essay does not take the standpoint of the "dominant bureaucracy” school and basically agrees with the standpoint that politicians and bureaucrats interact with each other in the policy-making process. And the LDP played a supportive role in aiding the industrialization.
The LDP government held the longest endurance record (38 years) of any post war political party in an advanced capitalist industrial society(Murakami,1982:65,66) starting from 1955 until the split of party in 1993 (Godement,1997:176). Although Japan is a country with two-party system, LDP dominance continued throughout almost for four decades, outweighing the support for all other parties combined. The longtime dominance of the conservative camp stabilized the consistency of policymaking and the national goals--"catching up with the West". Even though the switch of party leadership happened all the time, this alternations of leadership inside LDP did not effect the overall policymaking of the party and the national strategy of "economy priority" was still overriding (Song,1994).
As described above, the bureaucry, political party and the market all participate in the Japanese economic policymaking. Some scholars offers the term “iron triangle” to describe the three-in-one combination of the LDP, the economic ministries and the zaikai--big business groups, and see this "triad” as the prime mover of advanced industrialization in the high growth period. These three are engaged in a "tug-of-war for their own interests"--the politicians want re-election and try to seize support from the bureaucrats and business groups , the bureaucrats want bigger budgets from the ruling party and Big Business want protection, subsidies, and freedom from the other two groups' meddling. However the roles played by the three in policymaking are different, and there are some debates on this issue. Some scholars characterize this system, by using the notion of "patterned pluralism", as a combination of a pluralistic system(market and parliament) and administrative intervention(bureaucracy) with the bureaucracy playing a leading role in decision making(Murakami,1987:71); other attach importance to the bureaucracy and private sectors while view the LDP which depended on "bureaucratic talent and business fund” play a supplementary role(Masumi,1988).
Nevertheless, in my opinion, this is less than accurate. I prefer to use Aoki's(1988) "bureau-pluralism” to describe the Japanese economic development model. The difference between the "bureau-pluralism" concept and the "iron triangle" concept is that the former takes notice of the various social groups in addition to big businesses, such as small business groups and farmers, in policymaking system. It does not deny the leading roles played by the bureaucracy and the supportive role of zaikai as well as the supplementary role of the political parties in the policymaking of Japanese economy, and these three are using this system to fulfill their self-interests, what it suggests is a more decentralized system as the power of decision making is also in the hand of people from different social groups. In the bureau-pluralistic state, "private interests are primarily aggregated into an industrial association and then transmitted to its counterpart in the bureaucracy, namely the 'original bureau' which is in charge of the industry." The original bureau bargains inside the government, "representing the interests of the industry under its jurisdiction"(Okazaki,2001:324).
The bureau-pluralistic nature of Japan's political economy is reflected in the deliberative council system. The deliberative councils in Japan serve as advisory body of the government to coordinate economic growth in the 1950s and the high-growth era. Its members include the representatives of industrial associations, representatives of social organizations and other economic experts (Song,2000). One major advantage of this system is that local information scattered around the industries can be incorporated quickly into government policy, and power of decision making is distributed to each bureau which represented the interests of an industry and the private sectors.
2. Policy Choice:
This part amplifies three strategies which the author believes to be most important to the development of Japanese economy.
The Japanese government was obsessed with the concept that Japan as a small country with no natural resources, could not survive only by producing exportable goods(Poter,2000:22). "Export or die"was the most popular slogan in 1950s and 1960s. Japan had to promote exports zealously and at the same time, restrict imports in order to balance its international payment. Therefore comes the "Promotion of trade strategy" which was the first pillar of the trade policy system from the 1950s to the late 1960s. Exports were promoted by such policy measures as subsidies, provision of low-interest loans for promising export industries, and preferential tax treatment of income for exploration of new export markets(Komiya and Itoh, 1988:176). Moreover, the substantial overvaluation of yen (exchange rate of 360 yen to the dollar set in 1949 versus 170 yen to the dollar previously) also played an important role in bolstering exports during that period.
Take the sewing machine industry as an example, it was promoted as an export industry immediately following the WWII. The government made great effort to support the industry by offering additional incentives for its manufacturers to allocate production for export and acting as a trading company to promote Japanese sewing industry abroad, even though the domestic market was growing rapidly.
Restriction of Foreign Direct Investment
Strict restrictions on foreign direct investment and "arduous rules governing local ownership also deterred foreign companies from entering the Japan's market". Because the government believed the infant industries and "industries with high spillover effects to other industries" need to be protected. One example is in the detergent industry, the government prohibited foreign ownership of Japanese corporations throughout the 1950s and 1960s. And "it as not until 1970 that the government allowed 50-50 joint ventures"(Poter,2000:24). Other industries with prolonged protection included automobiles, computer and photo film. However, the gradual liberalization of those restrictions was under way from mid1950s until early 1970s.
Technological Promotion Policy
Japanese technology policy could be traced back from the Meiji Restoration of 1868 with the purpose of stimulating the growth of manufacturing industry. The policy contains two major aspects: import of the Western technology and technology innovation. As Freeman(1987:32) has noticed, "[Japanese technology policy included]intense efforts to import and whenever possible to improve upon the best available technology in the world". Whereas in its early years of high grow era, Japan adopted the export-led strategy and simultaneously restricted import of foreign goods, as mentioned above, Japan zealously imported Western technology because it is the most efficient way to restore and develop its economy in early postwar period and also because it creates new comparative advantage of Japan in 1970s when more and more Japanese industries had caught up with the Western level of productive efficiency.
It is noteworthy that a strong impetus from the government (i.e.,MITI) to promote technological development and modernization of Japanese economy. As early as 1950s, Japanese government saw it was their responsibility to encourage the introduction of advanced technology through new investment as the 1952 Enterprises Rationalization Promotion Law(Freeman,1987:35) provided direct government subsidies for the installation and operation of new machines and equipment, since during the 1950s and 1960s, the basic goal of economic policy was to encourage corporations (mainly were heavy industries)to adopt increasingly large and efficient scales of production. By the late 1960s and early 1970s, especially after the oil crisis of 1973, the government realized that the pattern of Japan's comparative advantage need to shift from the former one (mainly in labour-intensive products) toward "processing and assembling-type manufacturing industries that depend on mass-production methods and medium to high technologies"(such as automobiles and communication facilities) rather than natural resources and cheap labour(Komiya and Itoh, 1987:213) as a means of sustaining economic performance. In the 1970s, the government began targeting high-tech industries to ensure than Japan would be at the forefront of technological development where financial rewards ere believed to be the highest.
What Japan has achieved due to its technology policy are: technological stockpile created Japan's unique system of low-cost mass production; also, during the 15 years from 1955 to 1970, it is said that Japan has imported and attained almost all the world most advanced technologies of that time which took nearly half a century for other countries to develop, this saved for Japan for at least 20 years to catch up with the developed countries. What's mote, by the end of 1970s, Japan has lead the world in a farily wide range of sophisticated manufacturing industries such as steel production, automobile and household electric appliances (Wang, Du and Li, 2006).
This essay analyses the main features of Japan's economic development in its high-growth era. The author divides the essay into two sections by assessing these features from two perspectives: internal and external perspectives.
From an external point of view, in the first section, the author points out that the US's influence contributes to the Japanese economic success since the US generously provided economic aids to Japan with the purpose of strengthening their alliance.
In the second section, the author credits several endogenous elements to the development of Japanese economy from an internal perspective. The author further divided this section into two parts: organization structure and policy choice.
The organization structure part assesses the different roles played by the government, industry and ruling party in policymaking and the relationships among the three, then the author makes a conclusion that the concept of "bureau-pluralism" can best characterize the unique Japanese system in which the bureaucrats plays as a leading role in decision making while the business groups and politicians serve as a supportive role, moreover, in Japan, the bureaucrats also represent the interests of the people which means that it is the people, not only the minority with a high social status, that participate in policymaking and make decision for the state. In this section, the author also points out several other unique features in the economic development of Japan during this time such as the moderate and selective government intervention, long-term ascendancy of the LDP as well as the Japanese style of corporate system including the keiretsu system, main bank system and also the peoplism in Japanese corporate culture. The policy choice part amplifies three strategies which the author believes to be most important to the development of its economy. These three are export-led strategy, foreign direct investment restriction and technological improvement and innovation.
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