The Japanese government is becoming less involved in shaping industrial policy - but what does this imply for the openness of Japanese markets to foreign competition?;In an extensive study of ""post-development"" Japan, Ulrike Schaede argues that, contrary to what many have suggested, the reduced role of government regulation may not result in more open markets. Instead, as has happened throughout Japanese history, deregulation and the recession of the 1990s have once again led Japanese trade associations to assume important regulatory functions of their own. They do this through ""self-regulation"" - setting and enforcing the rules of trade for their industries, independent from the government. As a result, many Japanese markets are now effectively governed by incumbent firms, in particular in terms of structuring the distribution system. As the record of post-war antitrust enforcement reveals, Japan's antitrust system considers most activities of self-regulation, other than outright price-fixing, as legal.
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