The Evolution of the Japanese Developmental State: Institutions Locked in by Ideas by Hironori Sasada (review)

At first glance, Hironori Sasada’s new book on the Japanese developmental state appears to travel over well-worn ground. After all, Chalmers Johnson’s classic MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975 (Stanford University Press, 1982) sparked a vigorous debate over the Japanese developmental state and other East Asian variants too voluminous to cite here fully.¹ Even more, others have studied the two specific subcases in the volume—industry associations and economic pilot agencies—and similarly located the origins of the developmental state in Manchuria under Japanese rule and the wartime period.² Yet surprisingly and happily, Sasada’s book makes two fresh contributions. First, Sasada adds explanatory rigor to our understanding of the evolution of the developmental state. Second, his book, using the case of the Japanese developmental state, makes a broader case for taking the role of ideas seriously in the study of institutions.

Unlike previous studies on the evolution of the developmental state, The Evolution of the Japanese Developmental State uses explicit hypothesis testing to explain how two key institutions of the developmental state—an economic pilot agency and industry associations—were first created in Manchuria and why they were reproduced during wartime Japan and through the early postwar period. Sasada, drawing on the literature on institutions, specifically considers hypotheses drawn from three theories that he calls “collective action theory,” “power-based rationalist theory,” and “ideational theory.” As he explains, collective action theory, really the rational choice approach to institutionalism, maintains that actors create institutions to overcome collective action problems. Furthermore, according to this view, institutions persist when all parties benefit from the institution and there are no incentives to defect. By contrast, power-based rationalist theory emphasizes the relative power of actors, who create institutions that reflect and maintain their power position. The distribution of power also determines institutional evolution with changes in relative power leading to institutional change. Finally, ideational theory contends that actors rely on ideas to guide choices about institutions. As Sasada explains, “they will make types of policies that comply with that [ideational] guidance and will reject policies that contradict it” (p. 11). Ideas perpetuate institutional continuity by reproducing themselves through education, training, and career paths.

To develop his argument, Sasada first lays out the case that the institutions of the developmental state did not exist prior to the 1930s in chapter 2, which compares the institutions and policies of the Meiji and Taisho eras with those of the developmental state. The book then tests each of the three theories to explain the evolution of the developmental state over three specific periods: first, in Manchuria under Japanese rule (1932–45) where he shows the origins of the developmental state were first developed (chapter 3); second, during wartime Japan (1937–45), when the institutions of the developmental state were introduced to the Japanese mainland (chapter 4); and third, during postwar Japan from 1946 to 1965 (chapter 5). In each of these cases, Sasada finds support for ideational theory. The book’s argument, supported by detailed research, is persuasive and balanced. While his framework tests discrete hypotheses, his analysis does not rule out the possibility of multiple causes, and in some cases he finds support for other theories, although he contends that they alone are not sufficient explanations. Sasada prefers thicker description and completeness over explanatory parsimony, a refreshing approach given the trends in social science.

The book’s second contribution is to the larger debate on institutions and the role of ideas. Sasada’s work draws on a strain of the literature within the historical institutionalist vein that has argued that ideas, not only economic rationality and power, are critical to understanding social and political outcomes.³ While this literature made a promising start, the work on ideas has not become a mainstream approach to studying comparative politics, unlike the constructivist paradigm in the study of international...