Japan’s Absent Mode of Regulation

Abstract

This chapter demonstrates that, despite the attempts at neoliberal reform, Japan's political economy has nevertheless been unable to return to sustainable levels of economic growth similar to those experienced before the bursting of the economic bubble in 1991. If one considers the three-year centered moving average of gross domestic product (GDP) growth in Japan in the period 1961–2018, Japan's economy has consistently struggled to rise above 2-percent annual-average growth for any three-year period since 1991. In part, this is a further consequence of the inability to achieve consensus around a new mode of regulation for Japan's national economy throughout this period. Thus, Japan suffers from the absence of a mode of regulation, and its efforts at liberalization have been unsuccessfully implemented—partly as a result of the opposition to efforts at reform. Japan's process of neoliberalization has therefore been impeded, incomplete, somewhat unsuccessful, and marked more by dissension and a failure to identify an alternative institutional compromise with which to secure a return to economic growth.