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 6: Party politics and the changing labour market in Japan

Masanobu Ido

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


In the 1980s, Japan was depicted as a model political economy that had successfully achieved both economic efficiency and an egalitarian society. However, Japan’s continuing economic difficulties since the 1990s have shed doubts on such a rosy view of the Japanese political economy. Currently, two contrasting perspectives on the Japanese economy exist in daily newspaper reports as well as academic circles. On the one hand, Japan still manages to occupy a respectable position among efficient and egalitarian countries. For instance, the ‘variety of capitalism’ (VoC) literature includes Japan in the group of coordinated market economies (CMEs) – political economic systems that achieve both economic efficiency and social harmony (Hall and Soskice, 2001). On the other hand, many commentators point to changes in the Japanese model of capitalism occurring since the 1990s, which are represented by a phenomenal growth of non-regular workers as well as a dangerous widening of the economic gap among Japanese households. Undoubtedly, Japanese voters’ uneasy feelings about the ‘disappearance’ of the traditional egalitarian Japanese society, in which they could expect a stable job upon graduation and rely on social security and a pension, have contributed to the landslide victory of the Democratic Party of Japan (DPJ) in the 2009 national election. Hall and Soskice (2001) predict that globalization will lead to the survival of CMEs and explain the continued capitalist diversity based on firms’ rational behaviors in institutional contexts.

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