Abstract

The planning process for developing Japan's industrial structure has no parallel either in the mixed market economies of the West or the planned economies of the communist regimes. While many Western observers would suggest that Japan is indeed a unique case, the fact is that Japan is the model of most of the countries of free Asia. The main point of Japan's economic planning is not to produce a blueprint but to give direction, and that direction is clearly market and trade oriented. There can be no question that in years past, Japan has used all kinds of trade and nontrade barriers to keep exports at bay and foreign investment to a minimum. There are still some sectors which remain protectionist and inward-looking, agriculture being the primary example. Contrary to evidence from planning skeptics, the Japanese model serves a very useful purpose by clarifying past mistakes and future direction. In this respect, Japan's approach is ruthlessly performance-oriented and acts as a barometer of international standards.