An Economic Analysis of Collectivist, Group-Oriented Societies: Implications for Japan‪.‬

We argue that if a society consists of quasi-autonomous groups with little mobility across groups, a constitutional framework is required to secure gains from intergroup trade. This society will be based on status and social norms which will arise to distinguish between cooperators and non-cooperators. We call this a multiple communitarian society (MCS). By its very nature a MCS will eventually discriminate against innovation limiting its development and lead to the potential evolution into an overlapping communitarian society (OCS). In contrast, an OCS has individuals who are members of multiple groups. Change from a MCS to an OCS will be complex. For example, vested interest groups will resist change and the transition will require the costly modification of society's constitutional framework. We make some preliminary arguments that Japan is moving from a MCS to an OCS. INTRODUCTION