MFJ Lunch Seminar - Japanese Economy and Society Long-term Economic Stagnation and Social Division-Disfunction of Japan's Welfare State

This presentation provides an overview of the post-war Japanese welfare state regime,
which basis had been on the “popularized moral,” and reveals that its economic foundations
have collapsed in the late 1990s. It clarifies the fact that the dismantling of the regime has
accelerated the division of Japanese society in recent years. The Japanese welfare state was
based on the principle of self-responsibility that assumed diligent labor, frugality, and savings.
Miraculous economic growth in the 1960s increased average income and enabled a natural
increase in tax revenue under a progressive personal income system. The government, however,
did not use this revenue increase to expand social services, but instead mostly returned it to
the taxpayer through personal income tax cuts. As a result, Japan’s household savings rate
had reached the highest level in developed countries. The savings were accumulated both in
private financial institutions and postal savings. Backed by such an ample amount of household
savings, private financial institutions financed a large amount of corporate capital investment,
and postal savings financed public works through the Fiscal Investment and Loan Program.
This financing mechanism enabled further economic growth. I define this kind of welfare state
regime characterized by low social spending, high savings rate, and dependence on economic growth as the Industrious State.

Dr. Ide is an expert on Japanese fiscal and financial policy. He has published numerous
books on Japan’s budgetary and monetary policy, including Worlds of Taxation:
The Political Economy of Taxing, Spending and Redistribution since 1945 (co-editor
with Gisela Huerlimann and W. Elliot Brownlee, Palgrave Macmillan, 2018), Debt and
Deficits in Industrialized Democracies (co-editor with Gene Park, Routledge, 2015).
He took part in various public committees in the government such as the Professional
Committee of the Tax Commission (Cabinet Office) and Council of Food, Agriculture
and Rural Policies (Ministry of Agriculture, Forestry and Fisheries), etc. He received
Osaragi Jiro Rondan Prize in 2015 and Keio University Award in 2016, etc.

Moderator: Adrienne SALA (FRIJ-MFJ)
Organization: IFRJ-MFJ
Co-organization: CCIFJ France Japon
Support: Ambassade de France au Japon