The Politics of Structural Reforms

The Politics of Structural Reforms

Social and Industrial Policy Change in Italy and Japan

Edited by Hideko Magara and Stefano Sacchi

For countries undertaking economic or political reform the case of Italy and Japan is both highly instructive and sobering. The Politics of Structural Reforms reveals what Italy and Japan gained and lost through a series of social and industrial reforms in the 1990s and 2000s, and why the changes they made in their policies have had little impact in softening the recent economic crisis.

Chapter 1: Introduction: two decades of structural reform and political change in Italy and Japan

Hideko Magara

Subjects: economics and finance, political economy, politics and public policy, political economy, social policy and sociology, comparative social policy, labour policy


Any reform needs to become the culture of the people if it is going to drastically change the entire political economy. However, the appropriateness of the reform is a totally different issue. The Italian and Japanese political economies have been characterized by the following forces for decades: deadlocked democracy; a stagnant economy; and sticky institutions surrounded by vested interests. Italy and Japan have been in need of fundamental reforms for more than two decades. The Japanese election in December 2012 restored the Liberal Democratic Party (LDP) back into office, and the Italian election in February 2013 brought the entire nation into a critical phase of unprecedented uncertainty. While the Democratic Party of Japan (DPJ) was defeated because of its self-destructive style of governing throughout its tenure, the technocratic Monti government lost in the 2013 election because of the Italian voters’ exhaustion from the severe austerity package forced upon them by the Monti regime. Were the Japanese and Italian voters not patient enough to support significant reforms? Or did they feel the need to protect themselves from incompetent DPJ governments (Japan) or from excessively harsh policies (Italy) through elections – the most important mechanism of democracy? This book examines the reasons why Italy and Japan were unable to circumvent the systemic crisis they encountered in the late 2000s and early 2010s by retrospectively tracing both countries’ attempts at social and industrial structural reforms in the 1990s and 2000s – the era in which neoliberal policy ideas swept the world.