Fettered by the past in the march forward: ideology as an explanation for today's malaise in Japan

Japan's ‘lost decade’ of the 1990s is more than 10 years of economic downturn. The fact that a further decade later the malaise continues suggests that this is more than just an extended bad patch. Measures have been implemented to revitalize the economy however, the Japanese economy continues to wither. Why is this the case? This is an historical institutionalist's argument drawn from D.C. North's work that reform measures fall short of their aims if they are not underpinned by a complementary ideology. And, effectively, Japan is a case in point. Japanese-language records of debates between policy makers in 1999, after a decade of reform, show that they continued hold to a ‘mental model’ of a political economy that was of the preceeding high growth period and, indeed, much further in Japan's past. Such key figures as Prime Minister Obuchi Keizō argued both for the inculcation of greater market competition and, at the same time, lamented the loss of Japan's former ‘virtuous capitalism’. In other words, fettered by the past, they prepared Japan for the future.