In the recent two decades, the stagnation of Japanese economy is the aim of the debate between the developmental statists and the neoclassical institutionalists (and the world-system Marxists!). In contrast, Gao Bai restricted the issue on the causality of the financial bubble and its busting.
Gao argued that the contradiction of cooperation and competition of corporate governance, the advantage of speeding growth, led to the financial bubble without well fiscal monitoring. The harsh competition and the banking dependency of the zaibatsu is increasing overtime. Moreover, the welfare system relied on the male-full-employment by the private institutions may be responsible for the survival and rigidity of cartels. After the Plaza Accord the unbound money supply flowed into the industries.
The book is well-organized and empirically convincing. The best pages are the "Some Reflections" from 264-271 about the misunderstanding of the developmental state. But interestingly, the role of "ideology" is much weakened compared with Gao's first book... Nowaday the Chinese developmental state is following the bubble-busting path!...Continua