Welfare and Capitalism in Postwar Japan: Party, Bureaucracy, and Business

In This Review

Welfare and Capitalism in Postwar Japan: Party, Bureaucracy, and Business
By Margarita Estévez-Abe
Cambridge University Press, 2008
360 pp. $27.99

If Japan is a thin welfare state, as is generally thought, why is its income distribution one of the most egalitarian of any advanced industrial society? This book marries an answer to this question with a general argument about the political determinants of welfare policies. The Japanese system is in fact more generous than it appears, because many benefits are targeted to specific groups outside the formal welfare system -- through public works, employment protections, subsidies to rural families, and the like. This is due, Estévez-Abe argues, to the workings of Japan's single-nontransferable-vote electoral system, plus some other structural features of Japanese politics. Politicians in this kind of system have to mobilize distinct groups of voters in their electoral districts, which they can do better with targeted policies than with universalistic programs. Drawing the logical conclusion from her analysis, Estévez-Abe predicts that the 1996 reform of the Japanese electoral system will eventually produce a shift to a universalistic but meager benefits system, like that of the United Kingdom. Missing from her analysis is the comparison case of Taiwan, which had almost the same electoral system and electoral reform as Japan. Although written for academic political economists, the book will reward study by anyone who wishes to understand the dynamics of Japan's distinctive form of modern capitalism.