The Analysis About Government-led Market Economy Of Japan

Since the war, the history of Japan’s economic development called acomplex history of economic catch-up.In this portion of the complete andcomplex annals of economic catch-up, the role of the Japanese governmentthroughout.In the economic catch-up phase, the Government centralizedconfigure the resources of the whole society through its unique industrial policy,economic development strategies, economic planning, administrativeguidance, and so on.At the same time,it learned the lessons of the first-movercountries,making the Japanese economy played a “latecomer advantage” andcatched up the Western developed countries in a short term.However,after thecompletion of the task of catching-up,the government decision-making reliedon the past path of the model of economic development,called a “fatiguesystem”.In this way,the positive factors in promoting economic development inthe catch-up phase in turn become obstacles and negative factors constrainingthe growth of the economy.In this paper, the writer analyzes the performance and role of theJapanese government in various stages of economic development,andcriticizes and reflects the respected “government-led”model in recent yearsbased on the problems exposed behind the success and development of thegovernment-led market economy after the “bubble economy”.At the sametime,the paper proposes policy recommendations for Japan’s economicdevelopment.Thus it has important reference value for China to refer andabsorb Japan’s experience and lesson.This paper is divided into four parts:The first part mainly elaborates the theories of the government-led marketeconomy,it has a more detail description of the balance and evolution aboutLaissez-faire and Government intervention from Classical economics,Neo-classical economics,Keynesian economics,New institutionaleconomics and Neo-liberal economics.Eventually it settles into thegovernment functions under the new world economic environment requirerestructuring in the New institutional economics.Facing to the pathdependence about the system design,the nation needs necessary institutionalchange and institutional innovation.All of the theories provide theoretical basisand support for the policy recommendation that making Japanese economyout of the long-term doldrums.The second part analyzes the formation process of the Japanesegovernment-led market economy and its performance in the macro and microeconomy briefly.It outlines the role and performance of the Japanesegovernment from the macroeconomics policy goals,the industrial policy,themonetary policy,the trade policy and the internal management.The end of thechapter describes the active function of Japanese government-led marketeconomy----the government-led market economy became the key factor forthe high-speed growth of Japanese economy in the particular period.The third part analyzes the problems behind the Japanesegovernment-led market economy system and the restraining effect on Japan’seconomic development.It elaborates how the government-led system designmanifesting system fatigue and why the government-led market economysystem in the Japanese economy changing from flourish to decadence.Theworld is changing,the Japanese are changing too,so,sticking to the institutionalmechanisms which once brought the rapid growth of the Japanese economycan not get a new economic growth engine.Even,if the conditional systemcontinues suppling without timely adjustment and institutional innovation,thissystem design not only will not bring Japanese economic recovery,but also willaggravate the status of economic downturn.The last part,based on the analysis of the previous chapter,it puts forwardtwo proposals for Japan’s economic reforms combining the current politicaland economic situation that Japan is facing,called external inclusive and internal adjustment.The above two points seem simple,but for Japan,they arecrucial.What’s more,in order to make better use of the international market toopen the way for the second point,Japan should do the first point modestly.Inthese times of globalization,in order to serve the national economy moreeffectively,any country should expose to the world economic environment.Infact,the government-led system is more serious and profound inChina.So,Finally,the paper compares the similarities between China andJapan’s economic system,and proposes some rational suggestions to avoidtaking the old ways of Japan and to achieve a true transformation of theChinese economy.