Industrial policy of the Ministry of Finance and Financial Policy of the Ministry of International Trade and Industry

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Iexamines how the Ministry of Finance and the Ministry of International Trade and Industry interact in allocating public and private money to industry. The focus is the interaction between the MITI which has information and will to make industrial policies but does not have capability to implement them and the MOF which has capability to implement industrial policies but does not have information and will to make them.Japanese industrial policies are often characterized as market-conforming policies. Just because they are policies, they intended to guide Japanese industries in a certain direction. The market is ever-changing, and a policy direction should be finely tuned so that it can conform to the market and avoid committing errors. The Japanese institutional arrangement surrounding industrial policies induced the ministries to examine them continuously form different angles. That behavior seems to have made the policies conform to ever-changing markets and to have Japanese economies success.