Twenty Years of Comparative Economics in Japan: From Economic System to Institutions and Beyond

Abstract

The Japan East Earthquake followed by tsunami and nuclear accidents happened on March 11th, 2011 considerably affected on Japan and even raised the question of sustainability of its present social and economic system. Together with the world economic crisis started in the summer of 2007 through Greece it again raised the problem of stability of market-oriented economy, and yet the escape route from the crisis has not been found. The present paper analyses the process of evolution and change of comparative economics as a scientific discipline in Japan and defines major trends and specific characteristics of its development. Particularly, we shed light on the path of evolution of economics of transition and transition market economies as a discipline in Japan. Subsequently tracing the changes from economics of transition towards economics of comparison of capitalist systems and later to institutional economics, we depict the prospects of development for comparative economic studies. Comparative economic studies have existed in Japan since the pre-war time and have shown its unique way of development. This might be illustrated to some extent by the fact that during the Cold War Japan was in-between the USA and Soviet Union, e.g. in the middle of fighting with each other economic systems. At the same time Japanese capitalism itself was considered as one of the economic systems. For Japan development path different from the so-called late capitalist countries one's, e.g. the way of socialism, seemed to be attractive in a sense of its valuable comparison with the development path of Japan. During transition period in 1990s transition economics became the pillar of comparative economic studies. In contrast to the economic policy analysis, two approaches were particularly developed-the importance of initial conditions and basic structure of the society and stress on the role of the government(East Asia, Japan). Later the shift was made towards issues of institutional economics. That evoked two approaches: new-institutionalism (focused on the discussion on formal and informal sectors) and Comparative Institutional Analysis, which explain diversity of economic systems through the institutional complementarities. As the result, studies on varieties of capitalism in a sense being equal to comparative studies on capitalist economic systems became the research focus of comparative economics. Diversified economic systems were divided into different groups based on the scale with double axis: liberal market economies(LMEs) and coordinated market economies (CMEs). Transitional economies also became categorized in the above typology. At present comparative economics is accomplished as an independent discipline, but continues its evolution in many ways. Recently the following comparative researches become quite outstanding: comparative studies on relations between company and society; market infrastructure and economic systems; world economic crisis and its impact on diversified economic systems. Due to evolution of researches on corporate governance, approaches valuing stakeholders' interests rather than the sovereignty of shareholders become more influential. In case of Japan, key issues mostly being discussed in literature are comparison between transition economies and capitalist systems, comparative economic studies on market institutions. This proves the fact of diversity and testifies that both transitional economics and theory of varieties of capitalism are the subject of research of comparative economic studies, as well as the Japanese social economic system deeply inclined in it.