Arthritic Japan: The Slow Pace of Economic Reform

By Edward J. Lincoln

Book Overview

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In the late 1980s, Japan's strong economic performance put it on a the verge of becoming a major player in regional and global affairs. But nearly a decade of economic stagnation, a mounting of bad debts, and a continuing stream of scandals have tarnished the country's distinctive economic model. At the turn of the millennium, the Japanese economy remained mired in a pattern of stagnation. As this disappointing condition dragged on, the government pursued policies to restore economic health. Yet Japan has been slow to embrace the systemic reform on which a robust economic recovery depends. In Arthritic Japan, Edward J. Lincoln examines the causes and implications of this weak response. Concluding that Japan is unlikely to pursue the vigorous reform necessary for economic growth, Lincoln warns of serious consequences: a stumbling economy bedeviled by recession and financial crisis, eroding leadership in economic and security issues, a continued defensive trade posture, and a disgruntled population that could turn a more nationalistic stance in foreign policy.

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• Format: Paperback
• Language: English
• ISBN: 0815700733
• ISBN13: 9780815700739
• Release Date: September 2001
• Publisher: Brookings Institution Press
• Length: 260 Pages
• Weight: 0.80 lbs.
• Dimensions: 0.7" x 6.1" x 9.0"

Customer Reviews

unfortunately, arthritis is a chronic disease

This is a timely book on the prospects for meaningful structural reform in the world's second largest economy, written by a long-time observer of Japan who served as a special advisor to Ambassador Walter Mondale in the Tokyo emabssy in the mid-1990s. Ed Lincoln examines the postwar Japanese economic model (an emphasis on indirect finance (banking) and a diminished role for shareholders in corporate governance; networks of affiliated firms (keiretsu); and government-led industrial policy) and the strains that globalization has placed on it. He argues that although the system has become sclerotic, that it satisfies the needs of enough political stakeholders to impede the formation of any stable coalition for fundamental reform. As a consequence, deregulation in Japan is often taken in half-steps, delivering far less than advertised by its proponents. Lincoln believes it is by no means certain that efforts underway will be sufficient to pull Japan out of its economic malaise.From a US standpoint, Lincoln argues that a weak Japanese economy is fundamentally against US interests. Japanese economic weakness is likely to contribute to policy tensions with the US, and Lincoln recommends that the US government pursue a "low-key" agenda of encouraging reform. The book is well documented with many tables and charts and fascinating examples.