Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth

Randall Morck and Masao Nakamura

No 13171, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Rosenstein-Rodan (1943) and others posit that rapid development requires a 'big push' -- the coordinated rapid growth of diverse complementary industries, and suggests a role for government in providing such coordination. We argue that Japan's zaibatsu, or pyramidal business groups, provided this coordination after the Meiji government failed at the task. We propose that pyramidal business groups are private sector mechanisms for coordinating and financing 'big push' growth, and that unique historical circumstances aided their success in prewar Japan. Specifically, Japan uniquely marginalized its feudal elite; withdrew its hand with a propitious mass privatization that rallied the private sector; marginalized an otherwise entrenched first generation of wealthy industrialists; and remained open to foreign trade and capital.

JEL-codes: G3 L23 L25 N15 N25 O14 O16 O19 O2 O21 O25 O38 O53 P1 P11 P12 (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-dev, nep-his and nep-sea
Note: CF IO EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Published as Randall Morck & Masao Nakamura, 2007. "Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth," Enterprise and Society, vol 8(03), pages 543-601.

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