Japan’s Great Stagnation
Show Less

Japan’s Great Stagnation

Forging Ahead, Falling Behind

W. R. Garside

This timely book presents a critical examination of the developmental premises of Japan’s high-growth success and its subsequent drift into recession, stagnation and piecemeal reform. The country, which within a few decades of wartime defeat mounted a serious challenge to American hegemony, appeared incapable of fully adjusting to shifting economic circumstance once the impulses of catch-up growth and the good fortune of an accommodating international environment faded.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 8: Reform Without Salvation: Japan 1997–2000

W. R. Garside


The financial and economic crisis that engulfed Japan in 1997 provided the country with an opportunity to effect radical policies for economic revival, ideally incorporating both macro and micro (structural) reforms that would, in earlier years, have been difficult to implement because of their distributional implications.1 Japan had already proved capable of change when moved to act. It had bailed out financial institutions as diverse as housing loan companies to the once powerful Long-Term Credit Bank of Japan and the Nippon Credit Bank, both of which were subsequently nationalized. City banks had been recapitalized from public funds and measures had been taken to enhance the protection of deposits and claims against failed institutions.2 However, until 1997 there was no clear or dominant consensus within Japan as to whether an alternative and more radical political economy was required to remedy its prolonged stagnation beyond the financial and political fixes that that hitherto been implemented. This was partly because sectoral interest groups and their political allies had a vested interest in forestalling reform and partly – indeed more fundamentally – because politicians, industrialists, bureaucrats and the public at large were ambivalent about what should be reformed, at what cost and in whose interest. Ryutaro Hashimoto, who was Prime Minister from 1996 to 1998, had been unequivocal in his rejection of ‘Japan Inc.’ as a model for the immediate future, and urged reforms in finance, education and social security. ‘The Japanese socio-economic system which has sustained the country over the 50 year post-war period,...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.