ABSTRACT

Germany and Japan have both brought about the remarkable achievement of combining rapid growth and high per capita incomes with high levels of income equality. 1 Important differences notwithstanding, each has attained economic success by nurturing market rigidities and long-term relationships that encourage investment in skills, technology and equipment. Based on an intense development of craft skills, Germany has developed a specialization in high-quality engineered products, while Japan’s forte at close relations between firms has given it a specialization in products that involve complex assembly (Lehrer/Darbishire 1997; Streeck 1997; Kitschelt 1991).