Japan's wheel of history
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Japan's wheel of history

Behind all the talk of Big Bang, bank recapitalization and tax cuts, Japan's real policymakers are following a path well trodden during the country's insular past. By Stephen Church.

There are foreign businessmen who have lived in Japan for decades who know little about the country or its history. That is a shame. In a historical context, Japan's current problems can be seen as part of a long cyclical process.

Japan has a long and isolated history. The origins of the original Yamato state date back to the year 350. This early Japanese state was strongly influenced by China through the Korean peninsula. In 645 there was a wholesale reform that imposed Chinese administrative systems on Japan in the first great modernization. The other great modernization was in 1868 when foreign influence imposed itself on Japan for the second time. There was wholesale reform again and predominantly German-style administrative systems were introduced.

As result of this institutional history, Japan has a centralized and powerful bureaucracy, neomercantilist economic management and a legal system in the continental European civil-code tradition. There is all the formality of the cabinet being responsible to the legislature (the Diet), a prime minister, general elections and so on. But the big-picture policy process is outside that loop. It is widely believed that the vice-ministers, the top civil servants from each ministry and agency, meet on Mondays and Wednesdays to determine cabinet decisions to be rubber-stamped by the politician ministers in their cabinet meetings on Tuesdays and Thursdays.

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