Conclusion: Prospects and Challenges for the Japanese Economy

Summary

This book began with a historical analysis of the Japanese economy in the modern period (from the Meiji Restoration until the end of the Second World War), followed by an analysis of some major characteristics of the Japanese political economy from the end of the war until the bubble economy in the late 1980s. The collapse of the bubble economy in the early 1990s was a major turning point in the Japanese economy, and Chapter 2 examined the economic changes, as well as continuities, since then until the current period. Chapter 3 examined key indicators of the Japanese economy, including GDP, prices, the foreign sector (trade and FDI), the government sector (government expenditures and revenues, taxes and government deficits and debts) and the welfare state (pensions, health care, elderly care, including the socio-economic phenomena related to the welfare state such as inequality and poverty). Chapter 4 examined the structure of the Japanese economy in terms of state-market relations exemplified by the developmental state, institutional complementarities, convergence and diversity of capitalisms under globalization, the dual economy, and the impact of regional economic integration.

Chapter 5 focused on the human and labour factors of the Japanese economy. It examined the main characteristics of Japanese human resource management and industrial relations, including their changes and continuities, gender discrimination, and labour market dualism and diversification. The chapter also examined the negative impact of labour market reform on society in terms of the deterioration of working conditions and union response to this situation as well as low fertility rates. The chapter concluded by examining declining population, rural revitalization and labour migration, both domestic and international, as a solution to revitalize the rural and regional economies. In this respect, the chapter also discussed the problems related to international labour migration, especially the poor working conditions of migrant workers and the inadequate union response. Finally, Chapter 6 identified some phenomena that characterize Japan's “Galapagos” syndrome, its failure to meet the global standard. It then examined the lack of digitalization in Japan as a particular example of economic inefficiency and some of the reasons behind this, chief among them being the legacy of the developmental state and interest group politics. The chapter claimed that these political factors lay behind the government and private-sector business regulations that protect inefficient economic sectors and maintain business practices that do not meet the global standard.