Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

Just as numerous scholars have delved into the interplay between markets and institutions in an attempt to explain the postwar economic miracle, this paper examines the relationship between markets and institutions in Tokugawa Japan in an attempt to better explain the phenomenon of economic development at that time. In particular, this paper focuses on the Tokugawa era institution of the sankin kotai, or alternate attendance system, and argues that conventional explanations attributing the unusual economic development of this period to the unilateral coercive government power of this institution are problematic. The author argues that the alternate attendance system must instead be understood as a rational institution which promoted mutual compliance ex post and allowed for credible commitments ex ante through its harmonization of interests. The resulting peace dividend generated the positive externalities requisite for the development of a market economy.

East Asia is a global geopolitical fault line, where historically great powers have interacted, collided, receded, and rebounded. Seen in the context of this long history, the end of World War II ushered in at least four paradigm changes of international and regional politics in Asia-Pacific.

This paper was published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

This discussion focuses on U.S.-Japan and U.S.-Korea relations and how the two interact. The U.S.-Japan review of the 1978 Defense Guidelines also will be considered, in terms of what it does and does not entail and in terms of its application to the security of the Korean peninsula and, more broadly, Asia.

An underlying theme of this presentation is that the U.S.-Japan and U.S.-Korea relationships can survive and prosper only if the United States, Japan, and Korea share some degree of confluence of views on relations with China. There are common objectives in Northeast Asia shared not only by the United States, Japan, and Korea, but by China, Russia, and perhaps even North Korea. Many of these objectives concern the Korean peninsula, where all of the powers want stability and no one wants to see war. From a theoretical viewpoint, everyone is looking toward a "soft landing" and eventual peaceful reunification. Sometimes the visceral South Korean view seems to differ, and some of the Republic of Korea's policies may be in contradiction with the stated desirable outcome; this may cause tension in the U.S.-Korea alliance in the future.

The desire for a soft landing does not mean that the major powers are pushing to hasten reunification. Ironically, the country least anxious to see it, namely China, is the one least often accused of trying to prolong separation of the two Koreas. South Koreans accuse Japan of trying to keep Korea divided, and whenever the United States talks with North Korea, it is similarly charged. That is not the policy direction of either Japan or the United States; in fact, the Koreans seem not to need help from the outside to be hostile to each other.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

In the area of economics, Jean OI's focus on loval self government links the political dilemmas of the previous section with the concrete economic problems of the locality in contemporary China. WIth her customary insight and skilful use of field reserach, Oi paints a complex picture of local development.

Reprint from The National Interest (Fall 1996).

There are huge discrepancies between the official Chinese and U.S. estimates of the bilateral trade balance. The discrepancies are caused by different treatments accorded to re-exports through Hong Kong, re-export markups, and trade in services. Deficit-shifting between China, on the one hand, and Hong Kong and Taiwan, on the other, due to direct investment in China from Taiwan and Hong Kong, is partly responsible for the growth in the China–United States bilateral trade deficit. The 1995 China–United States bilateral balance of trade in goods and services, adjusted by both re-exports and re-export markups, may be estimated as US$23.3 billion, a large deficit but considerably smaller than the often-cited official U.S. figure of US$33.8 billion.

One of the most persistent and important questions in international comparisons of health systems pertains to the wide divergence in costs between countries. Japan has significantly lower per capita health care costs than does the United States, despite having a fee-for-service reimbursement system and universal coverage, and aggressively purchasing and utilizing equipment-embodied medical technologies. 1 One important factor in the increase in American health care costs over time has been the substitution of surgical intervention for medical treatment. 2 This leads us to consider differential rates of surgery as a potential explanation for divergent cost performances. Indeed, although Japan has one-half the inpatient admission rate of the United States, it has only one-quarter the surgery rate per capita