More than a year after Prime Minister Junichiro Koizumi debuted under the "structural reform" slogan, its real meaning remains vague. The pivotal question is, what aspects of the Japanese structure (systems and practices) should be changed, and how?
Economists' standard answer is that the Japanese structure should be changed to the American-style structure, the model for free and competitive market economies. In other words, their prescription is that Japanese systems and practices should be rebuilt under market principles.
It will be extremely difficult to reshape the Japanese structure, which has been built over ages, to the diametrically opposite American structure. Economists know this full well, yet they believe Japan must change against all odds.