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Japan As A Developmental State In The Post-War Period

Japan As A Developmental State In The Post-War Period

The post-World War II Japanese economic development was a catch-up process with other industrialized economies. Economic policies and corporate strategies were conducted with this utmost mandate in mind: to catch up. This general goal was shared by all economic agents with a national consensus. Macroeconomic policies, particularly monetary policies were conducted in order to provide funds to strategic sectors for economic development. Japanese-style market system(s) functioned fairly well in strengthening international competitiveness of the tradable-goods-producing industries. Although the domestic markets were heavily protected in the early stages of Japan’s post-war development, a potential threat of global competition provided incentives for productivity growth as Japanese industries look for export markets. On the other hand, investments in non-tradable sectors were not fully funded. Those sectors were not directly exposed to global competition either. As a result, development of non-tradable sectors lagged behind. Elements of Japanese post-war development system had a competition-restrictive nature. The system functioned well during the catch-up process.
	The Japanese economy started to recover quickly from the destruction/destitution of World War II and jumped back to a path of rapid growth. Several favorable external/imposed conditions assisted this jumpstart and a sustained rapid economic growth followed. Endogenous factors that encouraged high growth

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