Japan since 1980 (review)

Looking at the book's title, a potential reader might be forgiven for assuming Japan since 1980 to be a broadly framed survey history of Japanese society and culture over the three decades. The book, however, is more narrowly focused. The authors themselves, one an economist and the other a political scientist, describe the book as one intended "to provide a detailed narrative of the transitions of Japan's political and economic institutions since 1980" (p. 22, italics added). While their description is not inaccurate, one could narrow things further and say the book is concerned mainly with the process and impact of financial liberalization, monetary policy, and fiscal policies, on the one hand, and electoral reform and governmental reorganization, on the other. All of these are fairly technical subjects.

The authors assert—with reasonable accuracy—that they geared the book to a "nonexpert" audience (p. 31). Although the book is by no means an easy read even for someone with some exposure to these subject areas, the authors nevertheless do a good job of explaining what they are writing about with a high degree of clarity while, thankfully, avoiding oversimplification and caricature, and this is particularly evident in their discussion of financial and fiscal processes and monetary policies. Typically, they first present a concise introduction to relevant general concepts and principles and then, after walking the reader through the specific (and often distinctive) Japanese institutional terrain, apply these in a highly nuanced manner to Japan's experience while weighing alternative explanations and utilizing a large number of very helpful tables and graphs. This mode of presentation is applied somewhat less systematically in the discussion of political processes. The authors, furthermore, treat political and economic processes in an integrated manner, with the result that they weave together an impressive number of strands to produce a convincing, multidimensional rendering of processes of change in the Japanese political economy in recent years.

Also welcome is the way in which the intensity of the coverage increases the closer one gets to the cutoff date (late 2007), which is precisely the opposite of what typically happens. Like a number of previously published volumes, the first part of the book is devoted to describing and explaining the rise and collapse of the so-called bubble economy and how this led to the economic stagnation that Japan experienced in the 1990s during its "lost decade." But unlike most extant works that cover similar territory, Japan since 1980 moves the discussion forward in the latter half of the book and describes in detail how Japanese financial, fiscal, and governmental institutions changed in what the authors see as critical ways over the course of the late 1990s and early 2000s. In particular, the authors see the period of government under Prime Minister Koizumi Jun'ichirō (April 2001-September 2006) as a turning point that irreversibly sealed fundamental changes in the character of the Japanese political economy. In this area, their conclusions are consistent with other very recent writing, but what distinguishes this work is the broadly framed and systematic way in which the authors make their case.

In explaining the rise and collapse of the bubble, and the postbubble economic slump, Cargill and Sakamoto synthesize a wide range of previous writing on the subject, prominent among which is Cargill's extensive work in this area. Like other economists who have worked in this area, these authors attribute the rise and collapse of the bubble to a flawed financial liberalization undertaken unwillingly by the Japanese government in the late 1970s and 1980s in the face of external pressure and the long postbubble economic slump to slow and insufficient responses and outright policy errors on the part of the Japanese government. But even when navigating this relatively well-traveled territory, the authors manage to add interesting angles to the story. For instance, they argue that the unwillingness of Japanese government officials to respond creatively and decisively in addressing the economic problems of the 1990s...