Crisis or Recovery in Japan: State and Industrial Economy

235 Pages·2007·2.61 MB·English

by  Dan Coffey

Crisis or Recovery in Japan

Crisis or Recovery
in Japan
State and Industrial Economy
Edited by
David Bailey
Professor of Economic Policy and International Business,
Birmingham Business School,University of Birmingham,UK
Dan Coffey
Senior Lecturer in Economics,Leeds University Business
School,UK
Philip Tomlinson
Lecturer in Business Economics,School of Management,
University of Bath,UK
Edward Elgar
Cheltenham,UK • Northampton,MA,USA
© David Bailey,Dan Coffey and Philip Tomlinson,2007
All rights reserved.No part of this publication may be reproduced,stored in
a retrieval system or transmitted in any form or by any means,electronic,
mechanical or photocopying,recording,or otherwise without the prior
permission of the publisher.
Published by
Edward Elgar Publishing Limited
Glensanda House
Montpellier Parade
Cheltenham
Glos GL50 1UA
UK
Edward Elgar Publishing,Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library ofCongress Cataloguing in Publication Data
Crisis or recovery in Japan :state and industrial economy / edited by David
Bailey,Dan Coffey,Phil Tomlinson.
p. cm.
Includes bibliographical references and index.
1.Japan–Economic policy–1989- 2.Industrial policy–Japan.3.
Globalization–Economic aspects–Japan.I.Bailey,David,1966- II.Coffey,Dan,
1966- III.Tomlinson,Phil,1969-
HC462.95.C75 2007
330.952–dc22
2007000727
ISBN:978 1 84542 095 6
Printed and bound in Great Britain by MPG Books Ltd,Bodmin,Cornwall
Contents
Contributors vi
1 Introduction:the attributes of the crisis 1
David Bailey,Dan Coffey and Philip R.Tomlinson
2 The workings of the Japanese economy 9
Donald W.Katzner
3 The cause of Japan’s recession and the lessons for the world 31
Richard A.Werner
4 Transnational monopoly capitalism,the J-mode firm and
industrial ‘hollowing out’in Japan 61
Keith Cowling and Philip R.Tomlinson
5 Globalization and the Japanese subcontractor system 82
Ulrike Schaede
6 Institutionally driven growth and stagnation – and struggle
for reform 106
Terutomo Ozawa
7 Kudoka,restructuring and possibilities for industrial policy
in Japan 133
David Bailey and Roger Sugden
8 The national innovation system:a key to Japan’s future growth 157
Hiroyuki Odagiri
9 The rise and fall of Japan as a model of ‘progressive capitalism’ 179
David Coates
10 ‘Can Japan compete?’reconsidered 197
Dan Coffey and Carole Thornley
Index 217
v
Contributors
David Baileyis Professor ofEconomic Policy and International Business at
the Institute for Economic Development Policy at the University of
Birmingham, and a member of DARE (Democratic Communities in
Academic Research on Economic Development). His research interests
include economic development policy, with particular regard to foreign
direct investment and the role of the transnational corporation, the
economics of transition, and European integration and enlargement. He
has undertaken extensive work on structural change in the Japanese
economy.He is widely published,and is co-author of several books includ-
ing (with George Harte and Roger Sugden) Making Transnationals
Accountable:A Significant Step for Britain(Routledge,1994).
David Coates is Worrell Professor of Anglo-American studies in the
Department of Political Science at Wake Forest University.He was previ-
ously Professor of Government and Director of the International Centre
for labour studies at the University ofManchester.He has published widely
on a range of economic and political issues and is the author of a large
number of books,including Models of Capitalism:Growth and Stability in
the Modern Era(Polity Press,2000) and (as editor) Varieties ofCapitalism:
Varieties of Approaches (Palgrave Macmillan, 2005). His current research
interests include ‘third way politics’and the responses of organized labour
to global production and trade,as well as comparative political economy
including Japan.
Dan Coffeyis Senior Lecturer in Economics at Leeds University Business
School,where he was until recently Director for all economics-related MA
programmes. His research interests span organization and operations in
manufacturing industries,political economy and industrial sociology.His
recent projects include a book on production myths and the world car
industry, published as The Myth of Japanese Efficiency: the World Car
Industry in a Globalizing Age(Edward Elgar,2006).He publishes in a wide
range of journals and is the co-editor (with Carole Thornley) of Industrial
and Labour Market Policy and Performance: Issues and Perspectives
(Routledge,2003).He is active in associations which include the European
Union Network for Industrial Policy (EUNIP).
vi
Contributors vii
Keith Cowling is Emeritus Professor of Economics at the University of
Warwick. His main research interests are in industrial organization, eco-
nomic democracy, development and industrial policy and exploring the
deficiencies of monopoly capitalism.He has played significant roles as an
industrial policy adviser and published extensively in the fields ofindustrial
economics and policy. He is the author of a number of books, including
Monopoly Capitalism (The Macmillan Press Ltd, 1982) and (with Roger
Sugden) Beyond Capitalism: Towards a New World Economic Order
(PinterPress,1994).Recent research includes innovative work on the causes
of ‘hollowing out’ in Japan. He is a member of DARE (Democratic
Communities in Academic Research on Economic Development) and a
founding member of the European Union Network for Industrial Policy
(EUNIP).
Donald W. Katzner is Thompson Professor in the Department of
Economics at the University of Massachusetts, Amherst. In a distin-
guished career he has pursued research in a number ofareas,with work on
microeconomics and general equilibriun theory and a series of contribu-
tions to the study of problems involving non-measurable variables, the
firm in organization theory, and the analysis of historical time and non-
probabilistic uncertainty. As well as a range of papers he is author of a
number of books, including Analysis without Measurement (Cambridge
University Press, 1983), The Walrasian Vision of the Microeconomy
(University of Michigan Press,1989),Time,Ignorance,and Uncertainty in
Economic Models (University of Michigan Press, 1998) and Unmeasured
Information and the Methodology of Social Scientific Inquiry (Kluwer,
2001). In addition he has worked on the general impact of culture on
economic behaviour with a particular focus on Japan and the Japanese
economy as a special illustrative case.
Hiroyuki Odagiri is Professor of Economics in the Graduate School of
Hitotsubashi University,Tokyo.His major research interests are in indus-
trial organization with a particular focus on the economics of the firm and
innovation, which he has extensively explored in the context of the com-
petitiveness ofJapanese firms and the Japanese economy.He is widely pub-
lished in books and journals, and is the author of Growth through
Competition,Competition through Growth(Oxford University Press,1992)
and (with Akira Goto) Technology and Industrial Development in Japan
(Oxford University Press,1997).His opinions have been sought by bodies
which include the World Bank Institute and the Japanese Government,and
he is currently Director of Research at the National Institute of Science
andTechnology Policy in Japan.
viii Crisis or recovery in Japan
Terutomo Ozawais Professor of Economics at Colorado State University.
His current research focuses on the theory ofinternational production with
particular regard to the relationships between foreign direct investment,
economic development and competitiveness, and on the applicability of
Japanese developmental paradigms to other regional contexts.He is exten-
sively published in a wide range of journals and is the author of a large
number of books, which include Institutions, Industrial Upgrading and
Economic Performance in Japan:The ‘Flying Geese’Paradigm of Catch-Up
Growth(Edward Elgar,2005).His other research interests include flexible
versus mass production methods and the impact on international trade and
investment patterns.
Ulrike Schaede is an Assistant Professor at the Graduate School of
International Relations and Pacific Studies at the University of California,
San Diego.She has held visiting teaching positions at the Haas School of
Business at the University of California Berkeley and Hitotsubashi
University,Tokyo.She has been a visiting scholar at the research institutes
of the Bank of Japan as well as Japan’s Ministry of Finance and the
Ministry of International Trade and Industry.Her current research inter-
ests include trade associations and government–business relationships in
Japan and Japan’s financial organization, and the role of the Ministry of
Finance in Japan. She has published in leading academic journals, and is
the author of Japan’s Managed Globalization:Adapting to the 21st Century
(M.E.Sharpe,2000).
Roger Sugden is Professor of Commerce at the Institute for Economic
Development Policy at the University of Birmingham, and a member of
DARE (Democratic Communities in Academic Research on Economic
Development).His research interests include economic governance,devel-
opment and democracy,with a particular focus on transnational corpora-
tions,small firms and industrial clusters.He is widely published and recent
publications include (with Christos Pitelis and James Wilson) the edited
book Clusters and Globalization:The Development of Economics(Edward
Elgar, 2006). He has played leading roles in international research and
learning projects, and is a founding member of the European Union
Network for Industrial Policy (EUNIP).
Carole Thornley is Senior Lecturer in the School of Economic and
Management Studies at the University of Keele,where she is also Director
of Postgraduate Research for the Institute for Public Policy and
Management. She is an expert on employment systems and structures,
industrial organization and business strategy,and has previously worked for
Contributors ix
major global manufacturing multinationals in Belgium.She is widely pub-
lished in books and journals which include the British Journal of Industrial
Relations, the Industrial Relations Journal, and Work, Employment and
Society, and has worked on numerous commissioned projects. She is an
experienced adviser to trade unions and has submitted evidence to
many official inquiries and reviews. She is co-editor (with Dan Coffey) of
Industrial and Labour Market Policy and Performance(Routledge,2003).
Philip R. Tomlinson is Lecturer in Business Economics in the School of
ManagementattheUniversityofBath,andamemberofDARE(Democratic
Communities in Academic Research on Economic Development). His
research interests are in industrial economics and political economy, with
a particularfocusonglobalization,economicgovernance,developmentand
industrialpolicy.Hehaspublishedsinglyandjointlyinanumberofbooksand
leadingjournalswhichincludetheEconomicJournal,TheInternationalReview
ofAppliedEconomicsandTheManchesterSchool.Hisrecentresearchincludes
collaborativeworkontheeffectsof globalizationandthe‘hollowingout’of
theJapaneseeconomythathasdrawninternationalmediaattention.Heisa
memberof theEuropeanUnionNetworkforIndustrialPolicy,(EUNIP).
Richard A.Werneris Professor ofInternational Banking at the University of
Southampton. His research interests are in financial markets and banking
institutions,with a particular emphasis on the impact of Japanese financial
institutions upon the macro economy. He has published extensively in a
number of leading international journals and is the author of Central
Banking and Structural Changes in Japan and Europe(Soshisha Press,2003)
as well as the widely acclaimed study New Paradigm in Macroeconomics:
Solving the Riddle of Japanese Macroeconomic Performance (Palgrave
Macmillan,2005).He has extensive experience in working for research insti-
tutes and the financial sector in Tokyo, where he was chief economist at
Jardine Fleming Securities (Asia) Ltd.