The operation field and operation scale of the government is always one of the variables affecting the economic growth. In the aspect of public article production and provision, the role of the government is unquestionable, whereas the government investment takes a leading position as one of the main tools regulating the economy. After the Second World War, the economic development of Japan has made outstanding achievement. It only took Japan around 15 years for its industrial development whereas it took other developed countries more than half a century. During this process, the government investment has played a very important role. The study on the generation background, development stage and experiences of the Japan’s government investment is of significant reference and inspiration value for our currently ever-increasing government investment. This thesis is divided into six parts.
The first part mainly illustrates the definition and relevant theory of the government investment. We think the government investment means the government (including central government and various local government authorities) inputs various resources to provide, produce and organize the supply of public articles for the citizens of the whole society. It is mainly focused on the key fundamental projects with public welfare, related to the national economy and people’s livelihood, and promoting the development of the whole national economy. The relevant theory of the government investment mainly includes three aspects. Firstly, connotation of the government investment, mainly referring to the government investment reasons, purposes and scopes as well as fund sources and utilization methods. Secondly, market failure and government investment, describing the relationship between the market failure and government investment from the aspects of resource allocation and economic stability. Thirdly, investment multiplier and investment policy effect, mainly illustrating the investment multiplier theory of Keynes.
The second part illustrates the historical background and development progress for the Japan’s government investment after the Second World War. In view of the Japan’s postwar financial practice, as the financial lever, both government investment and tax reduction are used. There has been the argument concerning which method is better. Since late 1950’s, the Japanese government has paid more attention to the government investment, with the investment amount increased obviously. After that, the Japan’s government investment is in the steady increase, gradually developed into current scale. The development progress of the Japan’s government investment after the Second World War is composed of altogether five stages. First stage: Japan’s finance and government investment when it was under UN control (1945-1951); second stage: finance and government investment when economy was independent (1952-1955); third stage: finance and government investment at the period of high-speed growth (1956-1973); fourth stage: finance and government investment at the period of low-speed development (1974 –1979); fifth stage: finance and government investment at the restructuring period (1980 – now).
The third part mainly illustrates the postwar fund raising and key investment field of the Japan’s government investment. After the Second World War, the domestic economic development of Japan has roughly undergone the three periods: postwar recovery, high-speed growth and steady development. The basic status of economic operation, management mode of macro-economy and industrial policy target are different from each other. Accordingly, the implementation target of the financial investment and financing and the content of government investment are different. During the period of economic recovery (1945-1955), the fund of the Japan’s government investment mainly came from the Fund Application Dept., and the fund was focused on those excellent large enterprises with optimum production element combination, high labor productivity and good product quality and economic benefit; during the period of high-speed economic growth (1956 –1973), the fund of Japan’s government investment mainly came from such policy financial institutions as development banks, and the fund was focused on key industrial sectors and social infrastructures; during the period of economic steady growth (1974-1990), the fund of Japan’s government investment mainly came from the fiscal fund and policy financial institutions, and the fund was focused on the increased investment for residential house construction and expanded investment for public causes.
The fourth part mainly illustrates the measures and features of postwar Japan’s government investment. After the Second World War, the Japanese government has accumulated many successful experiences in managing the government investment. To summarize, it mainly includes the four aspects: firstly, stabilize investment through completing the legislation. After the Second World War, the Japanese Government has promulgated more than 20 laws for enhancing the government investment, and these rules and regulations have made the Japan’s government investment fully under the legislation protection and supervision, ensuring legally the continuity and stability of various policies, including the government investment. Secondly, guide the investment through making plans. After the Second World War, the Japanese government has made the mid-term and long-term economic plan to stipulate the total intention of the government investment and also made some special plans to specify the detailed requirement for government investment, stipulating that the future government investment shall adapt to the multiple and intensive national demand. Thirdly, ensure investment through government interference. After the Second World War, the financial fund of the Japanese government includes four types: general accounting budget fund, special accounting budget fund, budget fund of the relevant government institutions and local financial budget fund. Through central and local finance, the government has not only provided large amount of social fund for the economic development, but also played an important regulating role for the investment of fixed capital. Fourthly, regulate the investment through setting up the “financial investment”. The Japanese government regulates the investment through financial investment loan, which is mainly reflected in such aspects as gathering the construction fund to distribute with plan based on the industrial policy, timely stimulating or inhibiting the total social demand through expanding or reducing the scale of financial investment, guiding the social investment orientation, etc.
The fifth part mainly illustrates the positive effect and experiences of Japan’s government investment after the Second World War. Its macroeconomic regulation achievement is mainly reflected in the four aspects: the government investment ensured the coordination and implementation of its industrial policy, promoted the technical progress, generally improved the labor quality, and put off the declination speed during the economic decaying period of Japan. The lessons of Japan’s government investment can be summarized into four aspects: the government investment fund is too dependent on the national debt, large-scale government investment has increased the financial deficit, leading an increase of the national and local government debt, the low utilization efficiency of the government investment has caused the resource waste, and the government investment management has resulted in the expansion of the administrative team.
The sixth part mainly compares the policy effect between the Chinese and Japanese government investments, and summarizes the reference and inspiration of the Japan’s government investment policy on China. Since China implemented expanding financial policy in 1998, the public investment used for the infrastructure construction has been increased rapidly. However, the large-scale financial investment expansion didn’t bring the expected effect, and it is directly due to the small investment multiplier. Since 1990’s, the Japanese government has implemented the expanding financial policy focused on enlarging the public investment. However, in view of the actual effect, the public investment multiplier is decreasing gradually along with the time, and the driving effect of the government investment on economic growth is not strong. Through analysis and study on the Japan’s government investment, we can get the following references and inspirations:
1．The government investment fund can’t depend on the financial deficit too much. We must pay attention to reducing the national debt dependence and keep alert all the time on the malignant inflation due to financial deficit.
2．The economic growth drive by the government investment needs certain basic conditions. As a developing country with large population, China has incomplete various infrastructures and the potential economic growth rate is higher than the real growth rate. It is necessary to keep certain scale of government investment within certain period.
3．The government investment is not the universal tool for promoting the economic growth and can’t solve the systematic and structural problems. The practice shows that when the economic system and structural problem become the main obstacle of economic development, the role of large-scale expansion of government investment on promoting the economic growth has become quite limited, even having negative effect.
4．The management form of government investment needs innovation, the management method needs improvement, and the implementation efficiency and transparency is also to be improved. Otherwise, the government investment is very easy to bring a series of defects due to owner absence, generating corruption.