If China is the potential economic power in Asia, then Japan is the current and long-standing champion. But this champion has been on the ropes for a number of years. The Japanese economy is stagnant, and its blend of government-industrial cooperation is under fire. It was only a decade ago that Japan's economy was the envy of the world. Many Americans openly lamented then that our system was only second best. If you're wondering what happened, The Ministry: How Japan's Most Powerful Institution Endangers World Markets will help. It's an outright indictment of Japan's powerful Ministry of Finance (called Okurasho in Japan), which influences all the key components of the Japanese economy. Author Peter Hartcher is an Australian journalist who lived in Japan for six years. He provides a detailed look at the inner workings of the Ministry of Finance. In fact, there is probably too much detail for many general readers. Hartcher opens a window on cronyism, wrongheaded policy, and a general distrust of market forces at the agency, all of which, he argues, have mightily helped Japan dig itself into a hole. This is a broad critique of Japan's once much heralded bureaucracy, though much of the reporting stops after 1995. There has been some further deregulation since then, but the nation still has many structural inefficiencies. A decade ago, Japan seemed unstoppable. Now it seems unstartable.

Reviewed by Neal Lipschutz.

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