Law and Economics Approaches to Bid Rigging
- New Horizons in Competition Law and Economics series
Little more than two decades ago, Japan was widely regarded as being one of the strongest economies in the world, about to overtake the United States. Much feared as an overwhelming competitor, it was praised for its low unemployment figures, its harmonic labour relations, quality improvement practices (kaizen), its good supplier relations, its effective ministerial guidance and social peace. Much of what was formerly seen as its key assets in growth are currently viewed as its liabilities, hindering progressive change. Reform was often seen to be obstructed by senior politicians, bureaucratic considerations and the vested interests of some business sectors to maintain the status quo. Today, the intimate relationship between bureaucrats, politicians and business – known as the “iron triangle” – has lost much of its power. Doubtless, in its recent history, Japan has faced a number of socioeconomic problems, which demanded prompt and cohesive attention. Among these were bad debts, which have piled up as a result of the investment bubble and have led the financial sector to the brink of a banking crisis. Given the opaqueness of the system with its strong monopolization of information, predictions of the magnitude of the bad debts have ranged from 8 to 30 per cent of the gross domestic product (GDP).
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