MITI and Japanese industrial policy, a bibliographical summary

Some (probably I’m still missing things) bibliography, as I don’t have time now to do a full article. A preliminary summary of the literature in Akkemik’s paper:

They first protected targeted infant industries from foreign competition. When they became competitive and when Japan introduced liberalization in capital flows and international trade, these industries were opened to foreign competition. The strategic industries in the aftermath of the postwar period and the 1950s were designated as coal, iron, and steel industries, which had strong forward linkages. In the 1960s, the targeted industries were capital-intensive petrochemicals, steel, industrial machinery, electrical appliances, and automobile industries. After the oil shocks in the 1970s, high-tech and relatively less energy-intensive electronics, computers, and semiconductors industries received preferential treatment from the government.

The role of MITI in industrial development in Japan has been a controversial subject of debate. While most economists admit the positive role played by MITI in industrial policy formulation and implementation, some others such as Sakoh (1984) and Pack and Saggi (2006) argue that private firms were the major actors in industrialization in Japan and what MITI succeeded was the provision of superior infrastructure and a positive business environment by putting in place the appropriate policies for the development of private firms. On the extreme, Sakoh (1984) even claims that there is no clear evidence of “administrative guidance” and that Japanese industries did not particularly receive preferential treatment from Japan Development Bank. He contends that Japanese government was like other governments and mostly supported politically strong groups such as farmers and ailing industries suffering from comparative disadvantages such as energy-intensive ones. He points to “government failure” in the form of inefficiencies and overcapacity in industries the government attempted to allocate resources. 5 However, this assertion is overly simplistic and ignores the political economy and state–capital relations which had indirect effects on industries.

Based on a vast literature of empirical studies, it can be safely asserted that private firms were indeed the main actors and deserve most of the credit for successful industrial development in Japan but the role of MITI as a facilitator and early on as a “guide” cannot be degraded. It should be remembered that although substantial amount of public funds were mobilized towards targeted industries, Japanese industrial policies relied on private firms, not public firms. Also, as Chang (2011) warned, the impact of industrial policies shall not be confined to the performances of targeted industries only. They also have indirect effects such as complementarities, linkages, and externalities, which are difficult to quantify.

Akkemik, K. A. (2015). Recent Industrial Policies in Japan. In Economic Planning and Industrial Policy in the Globalizing Economy (pp. 181-205). Springer International Publishing.

Benjamin Powell. “Japan.” The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. Retrieved February 4, 2016 from the World Wide Web: http://www.econlib.org/library/Enc/Japan.html

Johnson, C. (1982). MITI and the Japanese miracle: the growth of industrial policy: 1925-1975. Stanford University Press.

Kokko, A. (2006). Export-Led growth in East Asia: lessons for Europe’s transition economies (pp. 33-52). Palgrave Macmillan UK.

Lavoie, D. (1984). Two varieties of industrial policy: a critique. Cato J., 4, 457.

Mulgan, A. G. (2005). Japan’s interventionist state: bringing agriculture back in. Japanese Journal of Political Science, 6(01), 29-61.

Owen, G. (2012). Industrial policy in Europe since the Second World War: what has been learnt?.

Pack, H., & Saggi, K. (2006). Is there a case for industrial policy? A critical survey. The World Bank Research Observer, 21(2), 267-297.

Stiglitz, J. E., & Yusuf, S. (Eds.). (2001). Rethinking the East Asian Miracle. World Bank Publications.

Sakakibara, M., & Cho, D. S. (2002). Cooperative R&D in Japan and Korea: a comparison of industrial policy. Research Policy, 31(5), 673-692.

Sakakibara, K. (1993). R&D cooperation among competitors: A case study of the VLSI semiconductor research project in Japan. Journal of Engineering and Technology Management, 10(4), 393-407.

Sakoh, K. (1983). Industrial Policy: The Super Myth of Japan’s Super Success. Asian Studies Center.

Sakoh, K. (1984). Japanese economic success: industrial policy or free market. Cato J., 4, 521.

Sigurdson, J. (2004). VLSI revisited: Revival in Japan. European Institute of Japanese Studies.

Warwick, K. (2013), “Beyond Industrial Policy: Emerging Issues and New Trends”, OECD Science, Technology and Industry Policy Papers, No. 2, OECD Publishing.

 

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