Long-Term Changes of the Government Saving Rate in Japan

Abstract

There has been much argument concerning the role of government in the process of economic growth and development. Despite a general acceptance of the view that it is an interesting and important question, very few studies of it have been made in Japan.1 Particularly in the case of Japan, this problem cannot be ignored because it is generally held that the government's fiscal activities were very much responsible for the country's rapid economic development. Compared with the governments of other countries, it seems that the Japanese government has played a more significant role in the course of the nation's economic development. This paper deals with one important aspect of this problem, namely, the government's performance in the saving-investment mechanism, in both prewar and postwar Japan. Generally speaking, the contribution of government to economic development is difficult to analyze concretely. No framework of analysis can be established easily. The conventional discussions presented in the past years have often emphasized sociopolitical aspects rather than issues that are amenable to economic analysis, explaining the institutional reforms of the fiscal system, and stressing chronological records from a historical point of view. Economic analysis as an approach to this problem has thus been neglected, and such noneconomic factors as the geography, customs, religion, and political environment characteristic of Japan have usually been the subject of discussion.2