ABSTRACT
Japanese government has tried to steer economic activity along perceived lines of national advantage, indicating which industries and regions have priority in economic development. Thus Japan has tried to combine planning with the market, hoping to get the best of each. One author notes that Japan has three interrelated parts to its planning process: national economic planning, regional economic planning, and industrial policy. By the mid-1980s, Japan retained formal import quotas on just 27 product categories, most of which were farm goods and none of which were major industrial items. The low product quality resulted partly because motor vehicle producers were forced to use Japanese steel, whose prognosis was equally bad. Some observers look at the rapid growth rate and vast improvement in product quality and conclude that government guidance of the economy has been successful. The first was the collapse of the economic bubble, owing to the Bank of Japan's sudden tightening of monetary policy.
