Political economists studying industrialized countries have claimed that certain institutional characteristics of governments—such as majority status, the number of parties in government, and stability—affect levels of public deficits. They have specifically argued that weak/unstable governments produce higher deficits than strong/stable ones. The author tests the validity of such claims by examining empirical data from 18 Organization for Economic Cooperation and Development (OECD) countries between 1961 and 1994. It is shown that evidence does not support the “deficit-prone weak governments” thesis. If anything, there is some evidence to suggest that deficits are lower under what political economists call “weak/unstable governments,” such as minority governments, coalition governments, or less durable governments. It is further shown that there is extremely limited evidence to support another line of argument: that the strength/stability of governments does not necessarily create deficits but does affect the nature of adjustment paths to economic shocks and that weak/unstable governments are less capable of reducing deficits once they are created or the economy gets thrown off track.

Abstract.  Japan has received conflicting assessments in the comparative political economy literature. This article seeks to identify the location of Japan's political economy within a comparative framework, building on recent analyses of macroeconomic policy and wage coordination. The author examines empirical records and shows that Japan's regime is best considered ‘Keynesian centralization’, rather than ‘monetarist (semi)decentralization’, in light of its effective wage coordination and its anti‐inflationary but flexibly accommodating macroeconomic policy. When there was national consensus on macroeconomic conservatism, Japan implemented restrictive policy and resembled monetarist centralization. However, Japan's monetarist centralization did not lead to distributional conflicts and high unemployment because its decentralized but coordinated wage bargaining and weak labor made it possible for employers and unions to achieve national diffusion of wage restraint without facing solidaristic wage demands by low‐paid workers.

Japan, Italy and New Zealand changed their electoral systems to similar (though also significantly different) mixed systems combining singlemember districts and proportional representation in the early 1990s. I examine the reasons for these three reforms being enacted, showing that while common symptoms of system failures were important in setting the three reform movements in motion in like fashion, they were not compelling enough to push reluctant politicians to enact reform. Other country-specific factors were needed to intervene and force them to take action. Japan's reform was enacted without the imposition of the popular referendum that occurred in Italy and New Zealand, but was made possible by changes in the nature of party competition that favourably altered political parties' incentives to reform. The change was brought about by the presence of pro-reformers within the dominant party and the relative coincidence between reform and the interests of parties.KEY WORDS _ electoral reform _ Italy _ Japan _ New Zealand _ party competition 1354-0688( 19991 0)5 :4;419-43 8;007719

An analysis of the performance of Japan's economic and political institutions from late 1970s to 2007. The authors explain how Japan's flawed response to new economic, political, and technological forces ushered in a lost decade and a half of economic development from 1990. Impressive economic performance in the 1980s masked an 'accident waiting to happen' - the collapse in equity and real estate prices in 1990–1. Japan's iron triangle of politicians, bureaucrats, and client industries, combined with a flawed financial liberalization process and policy errors by the Bank of Japan and the Ministry of Finance, brought Japan to an abyss of deflation, recession, and insolvency by the late 1990s. The turning point was the election of Koizumi as prime minister in 2001. The book explores Koizumi's economic reform, new developments in socioeconomic conditions, the politics and economy after Koizumi, and the economic and political challenges facing Japan in the new century.

Abstract.  Comparative political economists have conventionally claimed that the strength and stability of governments affect policy making and performance, and that what they call ‘weak governments’– multiparty, minority and short‐lived governments – show poorer economic performance. This article tests this and related hypotheses on deficits, economic growth, unemployment and inflation by examining data from 17 OECD countries. I find that there is generally little evidence to indicate that so‐called ‘weak governments’, when considered independently, produce poorer performance than strong ones. However, the effects of different government types are partly contingent on central bank independence and labour organization. When central banks are independent, coalition governments exhibit better inflation and economic growth performance than one‐party governments, but the opposite happens when central banks are dependent. I attempt an explanation for these relationships. I also find that independent central banks, under certain conditions, lead to lower growth and higher inflation. Thus, some of the benefits of central bank independence are context‐specific, depending on other political‐economic factors.