New Political Economy, Vol. 7, No. 3, 2002 Japan and World Order DOMINIC KELLY Contemporary Japan is clearly displaying all the symptoms of a serious malaise. The economy shows no sign of emerging from its decade-long slump, the political system is bogged down in the mire of factional in-ghting, the bureaucracy is seemingly inept and both politicians and bureaucrats have about them a whiff of corruption. As a consequence Japanese citizens are staying away in droves from retail outlets and voting booths alike. The short-term implications of this for the global economy are discussed almost daily in the quality press. These discussions suggest that the continued prostration of the Japanese econ- omy can do nothing other than spell bad news for all of us, especially since the US economy has yet to show signs of a sustainable recovery following its irtation with recession throughout 2001. This is well taken. What is also needed, however, is an analysis of the medium-to-long term implications for the global political economy of the changes underway within Japan. This article aims to do just that by assessing the contemporary condition of the Japanese political economy and by pointing to some of the implications of prolonged recession for the country and the regional and world orders of which it is such a vital part. In the round, the article suggests that the effects of continued Japanese misery will be felt the world over and will impact not only upon established economic structures and relationships but on political, social and strategic structures and relationships also. The argument unfolds in three stages. A brief section laying out the theoretical framework is followed by a survey of the nature and origins of the Japanese crisis, while the third section details the Japanese response and the impact this is already having on the world around it. Theoretical frameworks: the need for eclecticism Mainstream IPE theory is not well suited to an analysis of this sort. In one way or another realism and liberalism, as well as variants of Marxism such as World Systems Theory, promise more than they deliver. In varying measure they lack sensitivity to the historical record, fail to appreciate the complex dynamics between Japanese society and the ‘outside’ world and between the strategic, political and economic realms, and insist on maintaining the ction of a neutral, ‘value free’ standpoint for observation. As a consequence, the conclusions often drawn from work of this stripe—that the end of ‘Japan Inc.’ as a potential Dominic Kelly, Department of Politics and International Studies, University of Warwick, Coventry CV4 7AL, UK. ISSN 1356-346 7 print; ISSN 1469-9923 online/02/030397-18 Ó 2002 Taylor & Francis Ltd DOI: 10.1080/135634602200001875 7 397