The Organization of the Developmental State: Fostering Private Capabilities and the Roots of the Japanese "Miracle"

Chalmers Johnson's MITI and the Japanese Miracle, more than any other single work, focused American attention and debate on the role of the Japanese developmental state in creating the post war "economic miracle." Johnson's orientation emphasized the continuity between pre and post war policy development in the formation of Japanese industrial policy. This paper is based on complementary research in the sense that it emphasizes the development of organizational capabilities in the private sector, and seeks to study the interaction of business and government policies. But in doing so, it calls for a revised perspective on Johnson's assessment of the relative importance of public policy. If the dual achievements of pace-setting national growth rates and international competitiveness define the performance of a "late" developing economy as "miraculous," then indeed, the inter-war era marked the first Japanese "economic miracle". Of course, one connotation of the word "miracle," that phenomenal Japanese conomic success could not be explained on the basis of preceeding conditions, could not be more inappropriate. The remarkable fact about Japanese conomic development has been the extent to which accelerated rates of industrial growth have been sustained, more often rather than not, starting even before the end of the Tokugawa period. Johnson has claimed that the earliest use of the term "miraculous" to