Japanese policy in the Asian economic crises and the developmental state concept

Abstract

This article examines Japan’s commitments to the developmental state concept after the Asian economic and currency crises. Some aspects of the concept have been regarded as the causes of the crises, and Japan was seen as failing to defend effectively its own developmental model. However, the Japanese government has strengthened policies and institutions for industrial cooperation toward East Asia after the crises, stressing the elements of the developmental state such as close business–government collaboration and effective uses of public corporations as measures to rehabilitate the growth model in East Asia. In its efforts to assist industrial restructuring in Thailand, the Japanese government made its Thai counterpart acknowledge the necessity of state intervention in fostering small and medium-sized enterprises, and sought to transfer experiences and know-how of institution building such as the advisory council system, the policy finance system and industrial development coordinated by trade associations. Thus, the Japanese government maintained and partially intensified the developmental state approach in its cooperation with industrial restructuring programmes in major East Asian countries after the Asian crises.