Race for the Exits: The Unraveling of Japan's System of Social Protection (review)

Japan may have emerged from its economic malaise, yet many Japanese feel that the country now faces an even more worrisome social crisis. In the postwar era, Japan performed remarkably well by many social as well as economic indicators, with high educational achievement, excellent health standards, low crime rates, and little income inequality. Not all was well, of course, as the economic miracle came with social costs in the form of in-dustrial pollution, examination "hell," long working hours, and gender discrimination. Yet Japan now faces new challenges in the very areas where it had succeeded, with declining educational standards, rising crime rates, greater economic inequality—and, of course, a plummeting birthrate.

For those interested in Japan's current social agenda, Leonard Schoppa's book offers a masterful overview. Schoppa sets the record straight on recent social trends and government policies, and he provides a sophisticated analysis of how the two interact. He goes beyond a more standard political analysis of how the Japanese government formulates social policy to examine how changing social behavior redefines political choices. He presents his argument via detailed case studies of a wide range of policy reforms, both successes and failures.

Schoppa contends that Japan's system of social protection has unraveled, and he seeks to explain why the government has not done more to stop this. His argument centers on two counterfactual puzzles. Given the high cost structure of the Japanese economy, why have Japanese firms not pressed harder for liberal market reforms? And given the lack of a social infrastructure to support women who want to combine work with child raising, why have Japanese women not pushed harder for social reforms? Schoppa is asking the right questions. Many political economists take interest-group policy positions (preferences) as given and then focus on how these preferences are filtered by the political system. But Schoppa problematizes both the preferences and mobilization of these groups. That is, he asks: what makes Japanese firms and women more or less favorable toward reform, and what motivates them to express their preferences in the political arena?

Schoppa proposes a creative solution to his twin puzzles, building on Alfred Hirschman's concepts of "exit" (withdrawal from a relationship or an organization) and "voice" (attempting to improve a relationship or an organization by complaining or proposing reforms). In short, he contends that Japanese firms and women have not mobilized to press for reform through the political system (voice) because they could opt out (exit) instead. Firms exited by shifting production overseas, and women exited by not marrying and/or not having children. Having escaped their predicament via exit, these firms and women have less reason to complain about the problems that prompted them to exit in the first place.

Schoppa's argument is seductive—yet not entirely persuasive. Some firms and women have indeed exited in the ways Schoppa describes, but many more have not. So even if he is right that those who exit have less reason to complain, he cannot explain why the larger corps who do not exit have not complained. If we take not getting married as one form of exit, for example, Schoppa's data confirm a clear increase. While only 5.5 per cent of the cohort born in 1941–45 were still unmarried in their late 30s, 13.8 per cent of those born 1961–65 were unmarried at the same age (p. 91). That is certainly a large increase in this form of exit, but the vast majority of women are still getting married. Likewise, most women are having children, albeit fewer children, and the majority of adult women are working. So there are plenty of Japanese women who face the dilemma of how to combine work and family in an inhospitable environment. Schoppa's puzzle remains unresolved: why don't they protest?

Hirschman himself argues that exit can either undercut or...