Several years have passed since the 'store wars' over barriers to foreign products at Japanese distribution firms. Yet among English-speaking readers, how these firms operate remains a puzzle. In this book, the best Japanese scholars in their fields attempt to unravel that puzzle. Avoiding culture-based explanations, they employ a systematic and rigorous economic logic---yet, since they also avoid mathematical notation, the argument remains accessible to generalist readers.

The great successes of the Japanese economy have often been attributed to differences in the Japanese economic system. Employing an exhaustive investigation of the roles of the government and banks, firms and networks, and workers and managers, Yoshiro Miwa illustrates that the standard principles of economics explain the dominant patterns of Japanese economic phenomena. Debunking many long-held myths, Miwa deftly propels readers to a fuller, more accurate understanding of the Japanese economy.

Yoshiro Miwa asks whether a state can correct market failures and in particular critically analyses the performance of the Japanese economy as a result of state intervention within it. In order to examine the capacity of the state to promote growth, Miwa examines the Japanese machine tool industry, the government's role in promoting this sector and government efforts to achieve growth in small and medium sized enterprises in Japan.

Within economics, few issues are more central than the role of the state in the economy; within Japanese studies, few are more central than the role the Japanese government has played in post-war economic growth. With exquisite attention to theory and meticulous attention to detail, this book focuses on both these topics with startling results. Yoshiro Miwa asks whether a state can correct market failures and in particular critically analyses the performance of the Japanese economy as a result of state intervention within it. In order to examine the capacity of the state to promote growth, Miwa examines the Japanese machine tool industry, the government's role in promoting this sector and government efforts to achieve growth in small and medium sized enterprises in Japan. Despite the huge interest worldwide in Japan's economic history and industrial performance, there is no other book that has approached this important topic in such a comprehensive and incisive manner.

Although most economists maintain a (justifiable) mistrust of a government's goals when it intervenes in an economy, many continue to trust its actual ability. They retain, in other words, a faith in state competence. For this faith, they adduce no evidence. Sharing little skepticism about the government ability, they continue to expect the best of governmental intervention. To study government competence in World War II Japan offers an intriguing laboratory. After all, governments direct wars. They decide whether to prepare for them, when to initiate them, how to execute them, and the terms on which to end them. Toward that end, the public sometimes grants them as much power as it can feasibly grant. And in Japan during World War II, the public granted the state the maximum power. In this book, Yoshiro Miwa shows that the Japanese government did not conduct requisite planning for the war by any means. It made its choices on an ad hoc basis, and the war itself quickly became a dead end. That the government planned for the war incompetently casts doubts on the accounts of Japanese government leadership more generally.