What has been the role of government industrial policy in Japan's extraordinary post-war development? How has the role changed in successive phases of growth? What "lessons" can be learnt from this experience by other nations, be they in the West, or developing countries or economies in transition attempting to introduce competitive market structures? These are some of the main questions addressed in this absorbing and thorough study. Dividing the period into three main phases, the author shows that policy played a crucial role in the initial period of post-war recovery. It did so not by "picking winners" but by creating a stable base from which development could occur by spreading the cost of introducing market competition over
time. In the succeeding high growth period, and more recently, Japan's industrial policy attempts only to promote the development of new technology, and smoothe the decline of sectors that are no longer globally competitive. That Japan itself no longer practices industrial policy on a wide scale is an irony little appreciated by those advocating the adoption of a "Japan-style" industrial policy elswhere.
Readership: Advanced undergraduate and postgraduate students of Japan, and of economic policy; policy-makers in industrialized and developing countries. Lay readers with an interest in post-war Japan, especially business people.
James E. Vestal, Chief Economist, Barclays de Zoete Wedd (BZW) Securities, Tokyo; Visiting Lecturer, Keio University.
"extensively researched book ... Japan's industrial policy has been debated with too much passion and too little data, and this book is a conscientious effort to rectify the situation" - Far Eastern Economic Review