what does government regulation do to the economy quizlet
Although Nihon'southward economic development is primarily the product of private entrepreneurship, the government has directly contributed to the nation's prosperity. Its deportment take helped initiate new industries, cushion the effects of economic depression, create a audio economical infrastructure, and protect the living standards of the citizenry. Indeed, so pervasive has government influence in the economy seemed that many foreign observers take popularized the term "Nippon Inc." to describe its brotherhood of business and government interests. Whether Japan in the mid-1990s actually fit this moving-picture show seems questionable, but there is little dubiousness that regime agencies continue to influence the economy through a multifariousness of policies.
Japanese attitudes towards government have historically been shaped by Confucianism. Japan oft has been defined as a Confucian country, but one in which loyalty is more of import than benevolence. Leadership stemmed from the government and potency in general, and business looked to government for guidance. These attitudes, coupled with the view of the nation as a family unit, immune government to influence concern, and businesses worked hard not merely for their own profits but also for national well-being. At that place was a national consensus that Japan must be an economic power and that the duty of all Japanese was to sacrifice themselves for this national goal. Thus, the human relationship betwixt government and business was as collaborators rather than as mutually suspicious adversaries.
Authorities-business organization relations are conducted in many ways and through numerous channels. The virtually important conduits in the postwar flow are the economic ministries: the Ministry building of Finance and the Ministry of International Trade and Manufacture, known as MITI. The Ministry building of Finance has operational responsibilities for all financial diplomacy, including the grooming of the national upkeep. Information technology initiates financial policies and, through its indirect control over the Banking company of Japan, the central bank, is responsible for monetary policy as well. The Ministry of Finance allocates public investment, formulates revenue enhancement policies, collectes taxes, and regulates strange commutation.
The Ministry of Finance establishes low interest rates and, by thus reducing the cost of investment funds to corporations, promotes industrial expansion. MITI is responsible for the regulation of product and the distribution of goods and services. Information technology is the "steward" of the Japanese economic system, developing plans concerning the structure of Japanese manufacture. MITI has several special functions: decision-making Japan's foreign merchandise and supervising international commerce; ensuring the smooth menses of goods in the national economy; promoting the development of manufacturing, mining, and distribution industries; and supervising the procurement of a reliable supply of raw materials and energy resources.
The Ministry of Transportation is responsible for oversight of all land, bounding main, and air transport. The Ministry of Construction is charged with supervising all construction in Japan and Japanesesupported construction away. Its responsibilities besides include land acquisition for public use and environmental protection every bit information technology related to construction. The Ministry of Wellness and Welfare is responsible for supervising and coordinating all health and welfare services, and the Ministry of Posts and Telecommunications is responsible for the postal service and electronic communications.
Industrial Policy
Afterward World War II and especially in the 1950s and 1960s, the Japanese regime devised a complicated system of policies to promote industrial evolution, and it cooperated closely for this purpose with private firms. The objective of industrial policy was to shift resources to specific industries in order to gain international competitive advantage for Japan. These policies and methods were used primarily to increase the productivity of inputs and to influence, directly or indirectly, industrial investment.
Authoritative guidance (gyosei shido) is a principal musical instrument of enforcement used extensively throughout the Japanese government to support a wide range of policies. Influence, prestige, advice, and persuasion are used to encourage both corporations and individuals to work in directions judged desirable. The persuasion is exerted and the advice is given by public officials, who ofttimes have the power to provide or to withhold loans, grants, subsidies, licenses, taxation concessions, government contracts, import permits, foreign exchange, and approval of cartel arrangements. The Japanese utilize administrative guidance to buffer market swings, conceptualize marketplace developments, and enhance market place contest.
Mechanisms used by the Japanese government to affect the economic system typically relate to trade, labor markets, competition, and tax incentives. They include a broad range of trade protection measures, subsidies, de jure and de facto exemptions from antitrust statutes, labor market adjustments, and industry-specific help to enhance the use of new technology. Rather than producing a broad range of goods, the Japanese selecte a few areas in which they can develop loftier-quality goods that they can produce in vast quantities at competitive prices. A good case is the photographic camera manufacture, which since the 1960s has been dominated by Japan.
Historically, there have been three main elements in Japanese industrial evolution. The first was the development of a highly competitive manufacturing sector. The second was the deliberate restructuring of industry toward higher value-added, highproductivity industries. In the late 1980s, these were mainly knowledge-intensive third industries. The third element was aggressive domestic and international business strategies.
Japan has few natural resources and depends on massive imports of raw materials. It must export to pay for its imports, and manufacturing and the sales of its services, such as banking and finance, were its principal ways of doing so. For these reasons, the conscientious development of the producing sector has been a key concern of both authorities and industry throughout well-nigh of the twentieth century. Government and business leaders by and large agree that the limerick of Japan's output must continually shift if living standards are to rise. Regime plays an agile part in making these shifts, frequently anticipating economic developments rather than reacting to them.
Afterward World State of war 2, the initial industries that policy makers and the general public felt Nihon should have were iron and steel, shipbuilding, the merchant marine, car industries in general, heavy electrical equipment, and chemicals. Afterwards they added the machine industry, petrochemicals, and nuclear power and, in the 1980s, such industries equally computers and semiconductors. Since the tardily 1970s, the government has strongly encouraged the evolution of knowledge-intensive industries. Government support for inquiry and development grew speedily in the 1980s, and big joint government-industry development projects in computers and robotics were started. At the same time, government promoted the managed decline of competitively troubled industries, including textiles, shipbuilding, and chemical fertilizers through such measures equally tax breaks for corporations that retrained workers to work at other tasks.
Although industrial policy remained of import in Japan in the 1970s and 1980s, thinking began to change. Government seemed to intervene less and become more than respectful of price mechanisms in guiding future development. During this period, trade and straight foreign investment were liberalized, tariff and nontariff merchandise barriers were lowered, and the economies of the advanced nations became more integrated, as the result of the growth of international trade and international corporations. In the late 1980s, cognition-intensive and high-technology industries became prominent. The government showed little inclination to promote such booming parts of the economic system as fashion blueprint, advertising, and management consulting. The question at the end of the 1980s was whether the government would become involved in such new developments or whether it would permit them progress on their own.
Budgetary and Fiscal Policy
Budgetary policy pertains to the regulation, availability, and cost of credit, while fiscal policy deals with government expenditures, taxes, and debt. Through management of these areas, the Ministry of Finance regulated the allocation of resource in the economy, affected the distribution of income and wealth amid the citizenry, stabilized the level of economic activities, and promoted economic growth and welfare.
The Ministry of Finance played an of import role in Nippon'south postwar economic growth. Information technology advocated a "growth first" approach, with a high proportion of government spending going to capital accumulation, and minimum government spending overall, which kept both taxes and deficit spending down, making more coin bachelor for private investment. Nearly Japanese put money into savings accounts.
In the postwar menstruum, the government's fiscal policy centers on the formulation of the national budget, which is the responsibleness of the Ministry of Finance. The ministry's Budget Bureau prepares expenditure budgets for each fiscal year (FY) based on the requests from government ministries and affiliated agencies. The ministry building's Revenue enhancement Bureau is responsible for adjusting the taxation schedules and estimating revenues. The ministry also bug government bonds, controls authorities borrowing, and administers the Fiscal Investment and Loan Plan, which is sometimes referred to equally the "second budget."
3 types of budgets are prepared for review by the National Nutrition each year. The general account upkeep includes well-nigh of the bones expenditures for electric current government operations. Special account budgets, of which there are nigh forty, are designed for special government programs or institutions where close accounting of revenues and expenditures is essential: for public enterprises, state pension funds, and public works projects financed from special taxes. Finally, at that place are the budgets for the major affiliated agencies, including public service corporations, loan and finance institutions, and the special public banks. Although these budgets are ordinarily approved before the showtime of each fiscal year, they are usually revised with supplemental budgets in the fall. Local jurisdiction budgets depend heavily on transfers from the central government.
Authorities fixed investments in infrastructure and loans to public and private enterprises are about 15 pct of GNP. Loans from the Fiscal Investment and Loan Programme, which are outside the general budget and funded primarily from postal savings, represent more than 20 percentage of the full general account budget, but their full upshot on economic investment is not completely accounted for in the national income statistics. Government spending, representing about xv pct of GNP in 1991, was low compared with that in other adult economies. Taxes provided 84.7 percent of revenues in 1993. Income taxes are graduated and progressive. The main structural feature of the tax system is the tremendous elasticity of the individual income tax. Because inheritance and holding taxes are low, there is a slowly increasing concentration of wealth in the upper tax brackets. In 1989 the government introduced a major revenue enhancement reform, including a 3 pct consumer tax.
Custom Search
Source: U.Due south. Library of Congress
Source: http://countrystudies.us/japan/99.htm
Post a Comment for "what does government regulation do to the economy quizlet"