I asked this question on the Business in Japan's group discussion list, in the hopes of eliciting some interesting/useful feedback. But, it is worth repeating here:
As someone with a masters degree in policy making in Japan, gained at the height of the fears of Japan "taking over the world" (right before Japan's big bubble bust), I am amused and bemused to see so many now revisiting the subject of industrial policy making, newly looking for solutions to the collapse of confidence in the laissez faire system. As my own studies were prompted by a number of encounters with Japanese policymakers stunned they were being credited with Japan's overwhelming success (again pre bubble bursting) I myself am bemused. Japan's post war growth and economic success is remarkable, even without the extremes of the bubble years. America's success and growth is also to be admired (despite the extremes of its bubble years). Surely, the issue that really needs to be examined more closely is humankind's continued susceptibility to bubbles? I would be interested in input on this subject from others immersed in the "Japan experience".