Effects of the Deconcentration Measures in Japan

• Author: Masu Uekusa
• Published date: 01 September 1977
• Date: 01 September 1977
• DOI: http://doi.org/10.1177/0003603X7702200309
• Subject Matter: Article

EFFECTS

O'F

THE

D,ECONCENTRATION

MEASURES

IN JAPAN

by

MASU

U

EKUSA·

The deconcentration measures imposed on

Japan

during

the occupation period were probably the greatest use of gov-

ernment power in modern times to reform industrial organi-

zation. The aims of the measures were to reduce economic

concentration through the dissolution of the zaibatsu, elimi-

nation of intercorporate shareholding

and

reorganization of

large enterprises, and to develop centrifugal forces through

.decentralizing and democratizing the economic system.

Scholars from the various fields of economics, sociology and

politics

are

taking increasing interest in the history of occu-

pation deconcentration measures. The present

paper

tries

to

analyse the long-term effects of the bold occupation decon-

,centration measures on industrial organization during the

more than a

quarter

of century

after

the occupation termi-

nated, by examining the effectiveness of the occupation com-

petition policy. This

short

paper

concentrates on analysis

of changes in market structure, especially in the field of

market concentration, overall concentration

and

intermarket-

group concentration, in which the effects of the deeoncen.

tration

measures emerge strikingly.'

The first section of the

paper

summarizes

the

deconcentra-

tion measures enforced during the occupation period and

presents a new look

at

the reorganization policy of

private

enterprises. The second section examines the short-run ef-

fects of the deconcentration measures immediately

after

the

occupation,

and

the

third

inquires into the long-run effects

of the measures and the postwar changes in public policy

of the

Japanese

government over about a 25-year period

•Professor of Economics, University of Tokyo.

AUTHOR'S

NOTE:

I am grateful to the Foundation for Japanese

Economic Research for

support

of this study.

687

688

THE

ANTITRUST

BULLETIN

following the occupation. The final section appraises the de-

concentration measures. My conclusion is that the formation

of many independent firms through zaibatsu dissolution and

alarge number of firm splits under the Elimination of Ex-

cessive Economic Power Law and the Enterprise Recon-

struction and Reorganization Law significantly reduced ag-

gregate market concentration and over-all concentration of

big business

at

least during the 1950s, but the centripetal

policy of the central government has gradually restrained

the centrifugal forces set in motion by the deooncentration

and democratization policies of the occupation period.

I. DECONCENTRATION MEASURES

DURING

THE

OCCUPATION

PERIOD

The deconcentration measures during the occupation

period went through a complex sequence but they broadly

include: (1) dissolution of zaibatsu organizations, (2) pro-

hibition of intercorporate shareholding, and (3) reorganiza-

tion (division, divorcement

and/or

divestiture) of enter-

prises.

In

this section the outlines of these measures

are

deseribed.s

Dissolution of Zaibatsu Organieations

The zaibatsu were amajor

target

of the occupation policy

with the aim of democratizing Japanese society and economy

and removing

Japan's

war-making potential. The ultimate

control of the zaibatsu organizations reposed in a few wealthy

families. Each zaibatsu family held a top holding company,

with

that

company controlling the operating companies (the

first-line and second-line companies), which in

turn

controlled

many other affiliates through subsidiaries and fractional

shareholdings. This pyramidal form of control was solidified

by interlocking directorates

and

the absolute loyalty of the

company managements to the zaibatsu families. The zaibatsu

thus achieved monolithic unity under the centralized direc-

tion of the top holding companies, and controlled principal

sectors of the Japanese economy.