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Introduction
Dynamics of change
Patricia A.Nelson and Marie Söderberg
Japan has been under fire for some time for bringing about changes too slowly, in particular relative to the United States, which tends to move rapidly in response to changing economic and political conditions. We argue in this book that while the criticism may be valid on some levels, Japan has been in transformation. What has happened in Japan has been overshadowed by what has happened elsewhere in Asia, where there have been immense changes both economically and politically. The rise of China, the financial crisis in South East Asia in 1997 and North Korea’s development of nuclear weapons are just a few examples of these dramatic changes. But has Japan, the world’s second largest economy, only been muddling through?
History tells us that Japan has been most capable of making radical changes in desperate times, for this occurred both during the Meiji Restoration as well as after World War II. The argument of this book is that Japan has been changing in tandem with regional and global forces. Some thought the bursting of the realestate bubble in Japan in the early 1990s had awoken the government and business leaders to the realities of a post-developmental state and globalized economy.1 Others interpreted the lack of action as an end to the Japanese model (or models) of export-led economic growth.2 We maintain that Japan has been in transformation due to pressures both internally and externally.
On the domestic level, Japan’s former governing party, the Liberal Democratic Party (LDP), was in trouble after losing its majority in the Upper House, which caused it numerous difficulties in passing legislation through the Diet. However, the former government did take some concrete steps forward. Prime Minister Taro Aso announced a number of stimulus packages, including one with record-breaking actual spending of JPY 15.4 trillion, or approximately 3 per cent of Japan’s GDP, to stimulate domestic demand and improve the overall economic picture.3
On an external level change has been under way for some time. At the time of this writing the global economy had fallen into its deepest recession in over a half-century, with the OECD predicting that economic growth in developed countries would decline in 2009.4 The Japanese economy is forecast to have the largest contraction of all, at 6.6 per cent, followed by the United States and the euro area countries, all of which are predicted to contract by an estimated 4 per cent.5 The ramifications of the economic situation are helping fuel speculation about the collapse of the old Japanese model of export-led economic growth, which in turn is expected to force export-led companies into a much anticipated phase of restructuring.6 Linked with this is advice from the Asian Development Bank (ADB) to other Asian nations to balance and bolster domestic demand.7 The upshot is likely to be Japan’s further integration with the economies of Asia.
In this book we draw attention to change through a number of case studies. The challenges are great but there have been changes and these are our focus. This chapter begins with a discussion of the processes of change. Next we address change in Japan’s modern history, moving on to an analysis of the recent diffusion of the drivers of change. Thereafter follows a discussion of the layout of the book, including a short presentation of the cases.
Processes of change
This book identifies the driving forces behind processes of change. We consider these at four levels: the individual, domestic, regional and global. On the individual level we assert that individual leadership matters. At the domestic level, public opinion is clearly important but so are such issues as demographics, employment and immigration, among many others. Changing political and security relations in Asia are factors driving change at a regional level. Global factors include Japan’s role in the international community and the degree of Japan’s economic integration into the world economy.
All of the authors who contributed to this book studied processes of change in their specialist fields ranging from political leadership, education policy, official development assistance, peace building and security to defence production, business associations and innovation policy. While this is far from a complete list of the processes of change taking place in Japan now, we would like to stress that we focus on the dynamics of change – rather than structural or institutional change per se – as they have been unfolding in recent decades. Changes have been driven by various factors at the four levels described above as well as from pressures outside Japan (such as a changing world order and changes in power relationships in Asia) and pressures within Japan (such as the increasing power of public opinion on politicians and our increasingly competitive domestic and global markets). We will return to this matrix of change in our conclusion.
As noted above, the changes that we have seen in Japan so far might represent the tip of an iceberg of radical change, for the current economic and financial crises could easily produce new drivers and thus stimulate further processes of change. There is good reason to believe that today we might be observing a major transformative period in history. Such periods occur when the old status quo dissolves making way for rapid change, or what Stephen Krasner called ‘punctuated equilibrium’. Thereafter a new status quo emerges in which gradual change, not radical change, becomes the norm. Kathleen Thelen and Sven Steinmo argued convincingly that Krasner’s model of punctuated equilibrium takes institutions as the independent variable in periods of status quo but then they become the dependent variable in periods of flux. Thus, they noted, institutions ‘explain everything until they explain nothing’.8 Dynamic analysis is preferable to ‘punctuated equilibrium’ when studying change, for according to Steinmo and Thelen there are opportunities to bring about radical change under conditions which they call ‘institutional dynamism’.9
We follow this approach for its emphasis on dynamism and dynamic change, using a broadened conceptualization – broader than the focus on institutions alone – that processes of change are vibrant, with both rapid and gradual steps, sometimes alternating, sometimes simultaneous. The changes that are taking place in Japan are multi-faceted and we take the view that dynamism is fundamental to research on processes of change. We take a multidisciplinary approach and aim to achieve cross-fertilization of ideas and research agendas with the overarching objective of attaining a deeper understanding of the processes of change than single-author, single-discipline or single-theory approaches can offer. We believe that processes of change occurring in, for example, the field of economics and business should be put into a broader perspective of politics, security, international aid and training if we are to perceive them fully and vice versa. By focusing on the processes that lead to change, the authors in this volume offer interpretations of specific cases of change many of which are occurring behind the scenes and yet at the same moment right under our noses.
We recognize that there is no single theoretical method or approach that could be applied to all of the issues addressed in the chapters of this book, for none could give a comprehensive perspective on processes of change presented in the book. Collectively, our objective was to analyse change as it happened on the ground, with an eye to questioning whether or not change was taking place at all. As a consequence, we settled on a case study approach, which provides enough flexibility to allow each author some leeway in examining the processes of change from various angles and in applying theory as appropriate to his/her individual discipline. The merits and demerits of the case study method have been debated among academics for some time, as there is always the risk of failing to distinguish between what is unique in a case and what applies in general. One way of getting round this is through comparative studies, and in several of our cases comparisons are drawn, either between Japanese policy and the policy of other countries or comparisons between Japanese approaches and those of other countries. The cases in this book are based on interpretations of a great deal of empirical material and as such are inductive.
We argue that case studies are particularly enlightening when it comes to studies of Japan, because they help underscore the point that change may not occur rapidly in highly coordinated political economies due to the nature of deeply interlinked groups within society.10 Highly coordinated political economies tend to have multiple interlinkages among actors at all levels of society. These ties are important elements in making the particular political economy function, but they also mean that radical changes do not happen quickly nor without a great deal of preparation and discussion. In the case of Japan, some have criticized this characteristic as a significant disadvantage because faster-moving economies, such as the United States and the United Kingdom, have been able to react comparatively rapidly to change, for example due to innovation in the financial services industry.11 Advantage or disadvantage in the capitalist system, the critical analytical point is that change, however fast, is afoot, and in Japan it is afoot in many areas that have not attracted much public attention. This book is an attempt to remedy this shortcoming.
The most common perspective in the English-language literature on Japan is, for better or worse, the American one, due to the sheer volume of the work produced there.12 Here we offer an alternative perspective, namely analyses from European perspectives. This volume connects the work of academics that are based in or have a long history in Europe. By taking a view on the process of change in Japan from the experiences in European countries, we offer an alternative to the most common perspective, the Anglo-Saxon one, which dominates the English literature on Japan. American scholars tend to take US–Japan comparisons as their frame of reference, due to the dominance of the Anglo-Saxon model of development that has been so successful, especially in recent years.13
Two-country comparisons often have the undesirable effect of limiting the perceptions of Japan and thereby restricting our opportunities to appreciate processes of change. In particular, countless developments in Japan in recent years have made it imperative for scholars to take a multi-country approach. Recently this has led scholars to employ European cases that function as reality checks rather than relying predominantly on a US–Japan perspective.14 If Japan is perceived as similar to Europe rather than very dissimilar to the United States, we suggest that Japan’s own self-image might be altered in a positive way and this would be desirable from our perspective. For example, when viewed in comparison with the United States, Japan looks ‘unique’ in that it is a small country with few natural resources. In reality, however, Japan’s natural resource supply is rather normal when compared with most European countries’ natural resource supplies.15
We note that it is remarkable that many of the cases included in this book have gone largely unnoticed. One reason may be the expectation that ‘the more things change the more they stay the same’.16 While this did characterize Japan during a period of relative stability after the oil shocks of the 1970s, we argue that since about the late 1990s this has simply no longer been true.
Change in Japan’s modern history
At certain points in history Japan has shown a remarkable ability to adapt. Perhaps the first and most famous era of dynamic change in Japan’s modern period was the so-called Meiji Restoration. Following a coup at the imperial palace in Kyoto in 1868, the Tokugawa shogunate, a military dictatorship, fell after more than 260 years of rule and a new regime grasped power. The young Meiji emperor was formally ‘restored’ to power, returning the imperial family to its rightful place at the centre of power. At that time, the emperor was only fourteen years old and power was to be m...
