Race for the Exits: The Unraveling of Japan's System of Social Protection.

RACE FOR THE EXITS: The Unraveling of Japan's System of Social Protection. By Leonard J. Schoppa. Ithaca (NY) and London (UK): Cornell University Press. 2006. xvi, 247 pp. (Graphs, charts, tables.) US$39.95, cloth. ISBN 0-8014-4433-0.

Scholars who study a particular Asian society always try to find lessons that provide insights into more general questions as well. Leonard Schoppa's book Race for the Exits is one of the few to reach both goals. He discusses in depth the change (or lack of it) in Japanese policies for business and policies to promote women in the workplace. Yet he simultaneously provides the reader with tools to explain why the process of policy change can vary so much in similar areas facing change.

He uses Albert O. Hirschman's book Exit, Voice and Loyalty (Cambridge: Harvard University Press, 1970) to explain why some actors are less likely to try to influence policy in Japan (voice), instead simply choosing to exit from the political process and pursue other goals. Hirschman observed that when the costs of political exit are very low or very high, reform is likely. Schoppa's example of low exit cost is financial market reform, where firms that could easily move financial transactions offshore while keeping operations in Japan. Policymakers responded quickly to this, changing the financial market structure to draw back these transactions. Schoppa's example of very high exit costs is the policy toward care giving for the elderly. Japanese women could not avoid these obligations under the Japanese system, and they lobbied effectively for assistance in caring for elderly relatives.

Yet, as Schoppa points out, these same actors (business managers and women) reacted quite differently to issues of business regulation and policies to encourage greater workforce participation of women. Why, he asks, should the same actors take such a different approach here? Competitive firms faced higher local costs due to an overregulated economy, but they could slowly exit by increasing their production abroad. Knowing they had this option, they could ignore the policy making. Uncompetitive firms thus controlled policy making and, not surprisingly, change was slow.

Something similar happened in policies for women's workforce participation. Women chose to slowly "exit" from the preferred position of combining work and family. There was no crisis, since they either chose to maintain the traditional norm of leaving the workforce after marriage, or they chose to forego childbearing for a career. Policies for increased workforce participation after marriage, and the accompanying increased fertility, have been a failure.

Schoppa tells this story with passion and clear exposition. Readers who know Japan well can skip some chapters on the postwar system, and readers looking for wider application can focus on the early theoretical chapters.

I hesitate to suggest criticism of such a stimulating book. For this reviewer, though, Schoppa's idea of "exit" is a bit too strong. Japanese policy seems to have a safety valve to allow the firms that are "a little better than normal" to get extra returns to stay in the system. A well-performing electronics firm can still sell product sourced abroad back into Japan with little penalty, and it can still steal market share in the protected markets from less efficient Japanese competitors. Why rock the policy boat if you can both gain from foreign investment and profit from the closed system? The same case can be made for women in the labour force. Women who choose to exit from childrearing are not punished, and are even, as Schoppa notes in his Toyota example, encouraged to stay after marriage if they are considered to be of management caliber. So it is not so much a race for the exit as a gentle stroll, inside and outside the exit gate.

Read the book to get a better idea of why the "good" people don't get involved in the policy process, and for an insightful read into the way policy is made in Japan.

TOM ROEHL

Western Washington University, USA