On the relevance of the German concept of 'Social Market Economy' for Korea

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Corruption in Japan: An economist's perspective

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Economic globalization and social stabilization: A dual challenge for Korea

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Economic relations between Germany and Japan: An analysis of recent data

The author takes a close look at bilateral German-Japanese trade and direct investment data, employing various techniques (intensity indicators, RCA, intra-industry trade). It turns out that German-Japanese trade and FDI links are indeed rather limited, as has frequently been stated. A number of somewhat surprising pieces of evidence do emerge, though. For competitive industries and with respect to emerging opportunities, the bilateral figures do show a healthy performance. --foreign trade,foreign direct investment,Japan,Germany

Economic Integration in East Asia and Europe: A Comparison

Different starting conditions and decision-making mechanisms of European and East Asian economic integration are identified. They have led to different paths of integration. The EU process had a major impact on political stability in Europe; it has increased economic stability, at the expense of dynamism and possible over-extension, though. East Asia still has rather liquid mechanisms. This allowed it to exploit its economic potentials flexibly, relying on open world markets. With new problems on the multilateral level, East Asia reacts with various moves, increasing intransparency. Both regions have in the past played out their respective advantages well. Both face limits now. The former paths cannot simply be extended, and doubts remain whether convincing regional strategies have already been found. -- Unterschiedliche Startbedingungen und Entscheidungsmechanismen regionaler Integration in Europa und Ostasien werden identifiziert. Sie hatten unterschiedliche Pfade wirtschaftlicher Integration zur Folge. Der Prozess der europäischen Einigung hat maßgeblich die politische Stabilität gestärkt; auch die ökonomische Stabilität wurde befördert, auf Kosten allerdings von Dynamik und mit der Gefahr einer Überexpansion. Ostasien besitzt noch liquidere Mechanismen. Damit konnte es sein ökonomisches Potenzial unter der Rahmenbedingung offener Weltmärkte hervorragend entfalten. Angesichts neuer Probleme auf multilateraler Ebene reagiert Ostasien auf verschiedene Weise, erhöht aber die Intransparenz. Beide Regionen haben bisher ihre potenziellen Stärken gut nutzen können. Sie können ihre früheren Pfade aber nicht einfach verlängern. Es bleiben Zweifel, ob überzeugende regionale Strategien bereits gefunden sind.Regional economic integration,regional monitoring,East Asia,Europe

Economic Integration in East Asia and Europe: A Comparison

Different starting conditions and decision-making mechanisms of European and East Asian economic integration are identified. They have led to different paths of integration. The EU process had a major impact on political stability in Europe; it has increased economic stability, at the expense of dynamism and possible over-extension, though. East Asia still has rather liquid mechanisms. This allowed it to exploit its economic potentials flexibly, relying on open world markets. With new problems on the multilateral level, East Asia reacts with various moves, increasing intransparency. Both regions have in the past played out their respective advantages well. Both face limits now. The former paths cannot simply be extended, and doubts remain whether convincing regional strategies have already been found.Unterschiedliche Startbedingungen und Entscheidungsmechanismen regionaler Integration in Europa und Ostasien werden identifiziert. Sie hatten unterschiedliche Pfade wirtschaftlicher Integration zur Folge. Der Prozess der europäischen Einigung hat maßgeblich die politische Stabilität gestärkt; auch die ökonomische Stabilität wurde befördert, auf Kosten allerdings von Dynamik und mit der Gefahr einer Überexpansion. Ostasien besitzt noch liquidere Mechanismen. Damit konnte es sein ökonomisches Potenzial unter der Rahmenbedingung offener Weltmärkte hervorragend entfalten. Angesichts neuer Probleme auf multilateraler Ebene reagiert Ostasien auf verschiedene Weise, erhöht aber die Intransparenz. Beide Regionen haben bisher ihre potenziellen Stärken gut nutzen können. Sie können ihre früheren Pfade aber nicht einfach verlängern. Es bleiben Zweifel, ob überzeugende regionale Strategien bereits gefunden sind

Wirtschaftspolitische Reformen in Japan: Kultur als Hemmschuh?

Das Papier geht von der Überlegung aus, dass eine nachhaltige Erholung der japanischen Wirtschaft eine entschiedene Reform der Wirtschaftspolitik voraussetzt, um verlorenes Vertrauen zurückzugewinnen. Dazu bietet sich neben einer Regelorientierung die Einrichtung unabhängiger Agenturen an. Dieser Weg könnte aber im Sinne des kognitiv-evolutionären Ansatzes der Theorie der Wirtschaftspolitik durch kulturelle Faktoren gefährdet sein. Untersucht werden der Einfluss von bestimmten Werten und Weltsichten, dabei insbesondere eine Disposition zu sog. generalisierten Austauschbeziehungen, die Chancen einer glaubhaften Selbstbindung über das Recht sowie der Einsatz von Elementen der direkten Demokratie und des Föderalismus. Insgesamt überwiegt in dem Papier eine skeptische Haltung gegenüber den Chancen einer Reform im obigen Sinne, selbst wenn sich einzelne Aspekte möglicher Lösungsansätze in der Realität bereits abzeichnen.The paper starts from the assumption that a lasting recovery of Japan's economy can only come about by a reform of economic policy decisive enough to re-establish confidence again. The adherence to the rule of law and the establishment of independent agencies might provide a solution, but these methods could well be jeopardised by cultural factors in the sense of the cognitive-evolutionary approach of economic policy theory. The influence of certain values and views is looked at, especially regarding a disposition towards so-called generalised exchange mechanisms, the prospects of a credible self-commitment via the rule of law as well as the employment of elements of direct democracy and federalism. By and large the paper is sceptical about the chances of a reform in accordance with the aims as set out above, even though there are in reality first signs of attempts at establishing the rule of law and agency independence

The role of Japanese local governments in stabilisation policy

Local governments in Japan account for about 80 per cent of general government spending when excluding social security expenditures. Therefore, for the implementation of fiscal policy it is important how local governments will behave. On the basis of the economic theories on fiscal federalism it is generally rational for local government entities, especially smaller ones, not to participate in the stabilisation policy of the central government and to take a free rider position. Such a behaviour would imply a substantial reduction or even an offsetting of the effects of a stabilisation policy of the central government. As for empirical evidence, a procyclical behaviour of local entities was observed in several countries, among them Germany. We show that in Japan this was not the case and that so far local governments do participate in the stabilisation efforts of the central government. In a second step we show the institutional arrangements that have enabled the central government to influence the fiscal behaviour of the local governments accordingly. Will recent regulatory changes and the enourmous debt level have a significant impact? We argue that although from April 2000 some legal changes in the direction of decentralisation were enforced, many influence mechanisms remained intact and thus the changes weaken the established system, but did not break it up altogether. --local government borrowing,intergovernmental fiscal relations,Japan,federalism,fiscal equalisation,fiscal policy,government debt,local allocation tax,local autonomy,public finance,stabilisation policy

Japan's silver market: creating a new industry under uncertainty

It has often been asked whether today´s Japan will be able to move into new and promising industries, or whether it is locked into an innovation system with an inherent inability to give birth to new industries. One argument reasons that the thick institutional complementarities among labour, innovation, and finance among its enterprises and the public sector favour industrial development in sectors of intermediate uncertainty, while it is difficult to move into areas of major uncertainty. In this paper, we present the case of the silver industry or, somewhat more prosaically, the 60+ or even 50+ industry, for which most would agree that Japan has indeed become a lead market and lead producer on the global market. For an institutional economist, the case of the silver industry is particularly interesting, because Japan´s success is based on the cooperation of existing actors, the enterprise and public sector in particular, which helped overcome the information uncertainties and asymmetries involved in the new market by relying on several established mechanisms developed well before. In that sense, Japan´s silver industry presents a case of of what we propose to call successful institutional path activation with the effect of an innovative market creation, instead of the problematic lockin effects that are usually associated with the term path dependence