The Japanese Political Economy

Journal of Japanese Studies

Since the global financial crisis, government debt has soared globally by 40 percent and now exceeds an astonishing $100 trillion. Not all countries, though, have fared the same. Indeed, even prior to the financial crisis, the fiscal fates of countries have been diverging, despite predictions that pressures from economic globalization push countries toward more convergent fiscally conservative policies.  Featuring the work of an international interdisciplinary team of scholars, this volume explains patterns of fiscal performance (persistent patterns of budget deficits and government debt) from the 1970s to the present across seven countries – France, Italy, Germany, Japan, South Korea, Sweden, and the United States. Employing a comparative case study approach, seldom employed in studies of fiscal performance, contributions illuminate the complex causal factors often overlooked by quantitative studies and advances our theoretical understanding of fiscal performance. Among other things, the cases highlight the role of taxpayer consent, tax structure, the welfare state, organization of interests, and labor and financial markets in shaping fiscal outcomes.  A necessary resource to understand a broader array of factors that shape fiscal outcomes in specific national contexts, this book will reinvigorate the study of fiscal performance.

Deficits and Debt in Industrialized Democracies (Routledge Research in Comparative Politics)

Governments confront difficult political choices when they must determine how to balance their spending. But what would happen if a government found a means of spending without taxation? In this book, Gene Park demonstrates how the Japanese government established and mobilized an enormous off-budget spending system, the Fiscal Investment Loan Program (FILP), which drew on postal savings, public pensions, and other funds to pay for its priorities and reduce demands on the budget.Park's book argues that this system underwrote a distinctive postwar political bargain, one that eschewed the rise of the welfare state and Keynesianism, but that also came with long-term political and economic costs that continue to this day. By drawing attention to FILP, this study resolves key debates in Japanese politics and also makes a larger point about public finance, demonstrating that governments can finance their activities not only through taxes but also through financial mechanisms to allocate credit and investment. Such "policy finance" is an important but often overlooked form of public finance that can change the political calculus of government fiscal choices.

Spending Without Taxation: FILP and the Politics of Public Finance in Japan (Studies of the Walter H. Shorenstein Asia-Pacific Research Center)

Bolder economic policy could have addressed the persistent bouts of deflation in post-bubble Japan, write Gene Park, Saori N. Katada, Giacomo Chiozza, and Yoshiko Kojo in Taming Japan's Deflation. Despite warnings from economists, intense political pressure, and well-articulated unconventional policy options to address this problem, Japan's central bank, the Bank of Japan (BOJ), resisted taking the bold actions that the authors believe would have significantly helped.With Prime Minister Abe Shinzo's return to power, Japan finally shifted course at the start of 2013 with the launch of Abenomics―an economic agenda to reflate the economy―and Abe's appointment of new leadership at the BOJ. As Taming Japan's Deflation shows, the BOJ's resistance to experimenting with bolder policy stemmed from entrenched policy ideas that were hostile to activist monetary policy. The authors explain how these policy ideas evolved over the course of the BOJ's long history and gained dominance because of the closed nature of the broader policy network.The explanatory power of policy ideas and networks suggests a basic inadequacy in the dominant framework for analysis ofthe politics of monetary policy derived from the literature on central bank independence. This approach privileges the interaction between political principals and their supposed agents, central bankers; but Taming Japan's Deflation shows clearly that central bankers' views, shaped by ideas and institutions, can be decisive in determining monetary policy. Through a combination of institutional analysis, quantitative empirical tests, in-depth case studies, and structured comparison of Japan with other countries, the authors show that, ultimately, the decision to adopt aggressive monetary policy depends largely on the bankers' established policy ideas and policy network.

Taming Japan's Deflation: The Debate over Unconventional Monetary Policy (Cornell Studies in Money)

Located between the Pacific Ocean and downtown Los Angeles, Loyola Marymount University is a comprehensive university offering 60 major programs, 55 minor undergraduate degrees and programs. The Graduate Division offers 39 master’s degree programs and one education doctorate, one juris doctorate and 10 credential programs. 
 
Founded in 1911, LMU is ranked third in “Best Regional Universities (West)” by U.S. News and World Report. LMU is the largest Jesuit Catholic university for undergraduates on the West Coast, with more than 6,000 undergraduate students and more than 3,000 graduate and law students. The state-of-the-art The William H. Hannon Library rates among the 20 best in the country according to The Princeton Review’s guide to “The Best 378 Colleges,” 2014. Bloomberg Businessweek ranks LMU sixth in the nation and third in the West in its 2013 Part-Time MBA rankings.

Loyola Marymount University

Gene Park is director of the Global Policy Institute at Loyola Marymount University and professor in the Political Science and International Relations Department. His expertise and research areas include East Asia, political economy, and international relations. He is currently working on projects on South Korea, Taiwan, and Japan. Prior to arriving at LMU, he taught at Baruch College, City University of New York. Professor Park has been a Global Taiwan Institute Scholar, Social Science Research Center Abe Fellow, and a Shorenstein Fellow at Stanford University’s Asia Pacific Research Center. In addition, he spent two years as a visiting researcher at Japan’s Ministry of Finance. He also has had affiliations with the Stockholm School of Economics, Academia Sinica, Keio University, Rikkyo University, Saitama University, and Yokohama National University. He is a member of the Maureen and Mike Mansfield Foundation’s U.S.-Japan Network for the Future. He co-authored a book entitled Taming Japan's Deflation, The Debate over Unconventional Monetary Policy (Cornell University Press, 2018). An earlier book, Spending without Taxation, FILP and Politics of Public Finance, was published by Stanford University Press. His articles and commentary have appeared in Japanese Journal of Political Science, Governance, Socio-Economic Review, Asian Survey, Pacific Review, New York Times, National Interest, Current History, Yonhap News, Kyodo News, Channel NewsAsia, and the Wall Street Journal. In his spare time, he enjoys playing tennis and visiting the beach and mountains.

Gene Park

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