Is the Japanese economy directed by the soft authoritarian guidance of the central bureaucracy (especially MITI)?
Japanese firms ignore MITI’s direction, and the courts back these firms up when the bureaucracy gets decides to press. For the most part, Miwa and Ramseyer supply an abundance of data and objective measures to show that the Japanese economy has never really operated in the “unique” way depicted by fifty years of mainstream scholarship in both Japan and abroad. In the case of keiretsu, they make a very strong case that the characteristic cross-shareholding is actually very rare, the so-called “lunch clubs” are rarely used for group decision-making, and most parts suppliers working under automobile companies make products for a large number of different rivals – not just their supposed keiretsu “parent.” The authors re-analyze the Sumitomo Metals case study – which is supposed to show that MITI punished Sumitomo for refusing to enter into a production cartel. Instead they find that not only did Sumitomo freely challenge MITI’s guidance but got away with it scotch-free. I find Miwa and Ra
