Answer:
Japan’s system of economic management is probably without parallel in the world. Though the extent of direct state participation in economic activities is limited, the government’s control and influence over business is stronger and more pervasive than in most other countries with market economies. This control is exercised primarily through the government’s constant consultation with business and through the authorities’ deep indirect involvement in banking. Consultation is mainly done by means of joint committees and groups that monitor the performance of, and set targets for, nearly every branch and sector of the economy. Japanese bureaucrats utilize broad discretionary power rather than written directives to offer “administrative guidance” in their interaction with the private sector in order to implement official policies. However, since the early 1990s, efforts have been made to limit the use of such unwritten orders, which have been castigated for creating an atmosphere of collusion between the authorities and big business.
There are several agencies and government departments that concern themselves with such aspects of the economy as exports, imports, investment, and prices, as well as with overall economic growth. The most important of these agencies is the Economic Planning Agency, which is under the Ministry of Economy, Trade, and Industry (until 2001 the Ministry of International Trade and Industry) and, apart from monitoring the daily running of the economy, also is responsible for long-term planning. The practice of long-term planning has been a major force in the functioning of the Japanese economy. According to the economic objectives of the government, various policy measures have been used to shift the allocation of resources among industrial sectors and to influence the organization of specific industries.
Control has been underpinned by the detailed regulation of business activities, particularly in the financial sector. However, by the early 1990s reducing government intervention in the economy had become a major objective of the authorities. This was viewed as a way to create new business opportunities and as a necessity for making Japanese domestic markets more accessible to foreign business, thus revitalizing what was then a moribund economy. A number of deregulation packages to remove and ease controls subsequently were introduced and implemented.
Explanation:
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