Twenty years have passed since the perestroika in Russia and Eastern Europe, and all the transition economies have experienced the new dimension of the market transition. The EU enlargement may be regarded as the most crucial phenomenon in explaining the evolution of the patterns and degree of transition. Particularly, Europeanisation (European conditionality) has become an anchor for the East European countries' markets. At the same time, the overall transition economies have sustained the positive economic growth after the financial crisis, and almost have aimed the following measures: building the market institutions and their enforcement, the political democratization, and creating the cohesive civil society. Some measures are common to those in the developed capitalist countries. Concerning the theoretical aspect of transition, in spite of the radical liberalization and privatisation, the market institutions cannot begin to work spontaneously and immediately as the reformers imagine at the beginning of the transition. The ownership changes are deeply influenced by the political process and the economic actors have responded to the new circumstance by themselves. In addition, some of the new owners are related to the former elites and their personal networks have resulted in their financial success. While the economic actors have sought the rent by the state capture, the government has also kept its influence over the economy. In this sense, we can observe the soft budget constraint syndrome in transition economies. Consequently, the political economic approach to the market transition has changed its target from the property right to its enforcement, corporate governance, and the economic actors' behavior. The informal institutions and the social capital are considered as the important factors for trust building. Ideology also plays a decisive role in legitimating rules. Beyond transition, it seems that the economic theory has set a micro economic problem whether the economic actors behave rationally.

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The 15 years of transition economies was the dual process of evolutionary transformation and economic integration. At present countries of transition economies are divided into the group of Central European and Baltic countries that attained the EU accession in 2004 and other countries. While to the former the transition process reached a provisional goal, other countries have still indeterminate future in the path of transition. This paper examines a series of evolutionary problems in the transition from the socialist planned economy to the market economy and argues the deficiency of endogenous view of transition. It is not denied that an evolution toward "market socialism" and "workers' control" might have developed if there had been no political revolution around 1989. However, the concept of evolution of "market socialism" and "workers' control" that retained the ideological heritage of socialism turned out to be untenable under the totally changed political constellation. The anomalies of capitalistic development, "insider privatization", "pseudo finance capitalism", and "recombinant ownership" emerged in the initial phase and some argued that a peculiar capitalism of East-European type would grow with these features. However, these features were soon marginalized by the dominant foreign capitals in the second phase. The items of the Transition Indicators of the EBRD are classified in "initial phase reforms" and "second phase reforms". The former include "price liberalization", "foreign exchange and trade", and "small-scale privatization". These are reforms that open transition economies to the world economy without substantial change. The real constructive changes are in the "second phase reforms", i. e. "large-scale privatization", "governance and enterprise restructuring", "competition policy", "infrastructure reforms", "banking and interest-rate liberalization", and "securities market and non-bank financial institutions". The second phase of transition started in the mid of 1990s after the recovery of the "transition recession". The making of market-supporting institutions was stressed and its progress was monitored annually. To understand the evolution of economic systems in the second phase of transition, a relocation of the evolutionary view that enables it to contain economic integration is needed. Finally this paper stresses the dual structure of governance in the transition/integration process - international as well as domestic governance - that guided accession countries around 2000 and prognoses the development of multi-layered governance in the framework of EU in these countries.

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In recent years, there have been growing concerns about the varieties of capitalism or market economy. This paper investigates the institutional approach to the varieties of capitalism(s) advocated by modern institutional school and "regulation" school. While breaking ties with Marxism in some critical points including the labor theory of value and the ideology of socialism, this approach inherits Marxian view that modern economy is not mere "market economy" as the horizontal network of contract and exchange but "capitalism" characterized by profit-seeking firms and the employment relation (capital-wage labor relation). The merits of this approach are as follows. 1) It regards a general theory of capitalism not as a closed self-contained entity but as an open system that can be modified or regenerated along with the historical development of capitalism. 2) It grasps capitalism as a multilevel and multiple structure of institutions allowing a wide range of varieties both at the level of individual institution and in the manner of the connections between institutions, as long as the overall interactions between institutions are compatible with the reproduction of the whole system. 3) It views capitalism as a composite system including not only markets and capitalist firms but also non-capitalist institutions like state and families as the indispensable factors for continuing existence and successful functioning of capitalism. 4) It analyses the long-run dynamics of capitalism from the viewpoint of incessant process of emergence, extinction, innovation, emulation, and transformation of institutions, and the change (evolution) of overall structure of institutions through such process. However, in order to unfold fully the rich potential of this approach the following problems should be addressed. First, its previous researches have concentrated mainly on the general methodology and the concrete comparison between various national/historical types of capitalism. Consequently, the effort to build a general theory of capitalism that is open to national/historical varieties is still just beginning. Second, consideration on the epistemological aspect of problem is not sufficient. Any kind of arguments based on uniqueness and singularity of particular institution (or set of institutions) would be unsound without some adequate epistemological foundation concerning the recognition of homogeneity or heterogeneity. Third, its project to extend the theoretical analysis of capitalism to various non-capitalist institutions does not seem to be accompanied by an appropriate strategy of division of labor or restriction of scope. In view of methodological pluralism, such strategy is necessary for effective allocation of intellectual endeavor. Finally, more attention should be paid to the problem of criterion on policy evaluation and the role of learning in the policy making process.

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In this paper, I view Adam Smith's logic that the exchange ratio of commodities is determined by the volume of labor that is bestowed in production. He deals with the subject mainly in the sixth chapter in the Wealth of Nations. His logic is submitted on the assumption that in the state of society which is not accumulated stock and is not appropriated land. In a refined form, Ricardo and Marx succeeded Smith's logic. And they insisted that the exchange ratio of commodities is generally determined by bestowed volume of labor. But in this paper, I consider that the proposition is not generally established even in the Smith's assumption. Value theory of labor, as the logic of exchange ratio, was faced with Transformation problem, but the proposition has seemed to have a problem in the realm of primitive exchange. In a word, when a surplus of goods doesn't exist in society, the exchange ratio must be determined by bestowed volume of labor. But when surpluses exist, the exchange ratio can be theoretically shifted from bestowed volume of labor. That is to say, the relationship between the exchange ratio and bestowed volume of labor seems to be weakened before Transformation problem. On the basis of that consideration, in the last part of this paper, recent movement of the logic of exchange ratio is surveyed. Traditional concept of value: value is determined by bestowed volume of labor, not only faces Transformation problem but also cannot comprehend the commodity which is not bestowed labor. So, the concept of value was needed to be spread. But by spreading the concept of value, it seemed that the interest of the logic of exchange ratio was backed. But now, that interest seems to come to the front again.

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As for the problem of Power there has been a marked difference between mainstream economics, on one hand, and Marxian and leftist economics, on the other. The former has simply ignored the problem while the latter seems to be in a theoretical impasse. Some Japanese economists have embraced with enthusiasm 'contested exchange theory' put forward by S. Bowles and H. Gintis. They are, however, unaware of the contributions which Japanese authors have for long advanced in various fields, not simply in economics. This situation is surprising and needs to be corrected. This paper's aimis to characterize the theory of economic power, in comparison with Bowles and Gintis' theory. The theory of economic power is characterized by the following three points: 1. Power is a binary relation, i.e., a relation between two parties facing each other. 2. Power originates in a particular type of incentive design, i.e. contingent renewal contracts which are not only economics theoretically also legally valid. 3. Power is ultimately based on two parties' opposing preferences with respect to labor, and therefore is unobservable from the standpoint of a third party. Thus we expect the theory of economic power will be developed as incomplete contract theory. In his recent microeconomics textbook, Bowles in fact defines power as one of Nash equilibria. Such a definition, however, does not do justice to the significance inherent in the concept of Power.

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This paper provides some discussions on 70s' Marxian exploitation theory, and also a few comments on Matsuo (2004) who criticized Yoshihara (2001). At the first place, we provide a correct proof of "Fundamental Marxian Theorem under Heterogeneous Consumption Demands" argued in Yoshihara (2001). Our new example definitely shows that there exists an individual labor with a negative exploitation rate in the von Neumann balanced growth equilibrium with a positive profit rate. Secondly, we develop a counterargument against Matsuo (2004) who criticized Generalized Commodity Exploitation Theorem. Although Matuo (2004) insisted that Generalized Commodity Exploitation Theorem is invalid from a "Humanist" point of Marxism view by providing a funny story of banana's exploitation, we argue that his banana story is not essential, so that the critical implication of Generalized Commodity Exploitation Theorem against the standard Marxian exploitation theory is still robust. Thirdly, we develop a conceptual criticism against Matuo (2004)'s alternative definition of Marxian labor exploitation, which would explain why it is problematic from the Marxian point of view.

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This article aims at reconsidering Roemer's CECP(The Class Exploitation Correspondence Principle) in the perspective of neo-classical growth theory. Roemer has proved CECP(The Class Exploitation Correspondence Principle) in various situations and then claimed that CECP is very robust. But he does not take long-term accumulation of capital into account. Roemer assumes that economic agents behave to maximize the one period utility or to maximize one period wealth. And then, time pass is regarded as just the overlap of one period maximization problem. This methodology is different from that of neo-classical growth theory in a major way. In this article, I try to introduce the method of neo-classical growth theory into the Roemer's model. In other words, I try to incorporate the assumption into Roemer's model that economic agent such as worker, who has less wealth than capitalist, also accumulates capital so as to maximize his lifetime utility or output. The main conclusions of this paper are as follows. Whether exploitation disappears in the long-run depends on the optional right of worker. If worker does not have a right to determine what ratio of labor power he allocate for accumulating his own capital, capitalist allocate all labor power of worker at the production of consumption goods. In this case, amount of capital that worker owns dose not grow since the initial period and exploitation remains in existence forever. In contrast, if worker has a right to allocate his labor power for his own accumulation, he accumulates capital to the same amount as the economic agent who lives in the standard model does. In this situation, the optimal response of capitalist to the behavior of worker is to accumulate capital to the same amount as worker will do. In other words, capitalist does not accumulate capital beyond the amount which worker aims at and will achieve someday. Capitalist exploits worker only in the transition period toward the steady state where differential of asset between worker and capitalist does not exist anymore.

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Recent ten years, Y.Shiozawa has showed a criticism of the distinction between micro economic theory and macro economic theory in economics. And, He has offered 'Micro-Macro Loop' (MML) which can be interpreted an alternative methodology or a new theoretical framework in economics. In addition, H.Uemura, A.Isogai, and A.Ebizuka have proposed institutional MML in the context of institutional economics. So, the principal aim of this paper is to clarify significances of MML. As a result of comparing with the existing theories and examining the detail of MML, it is concluded that MML has two points of originalities in economics. These are followings. (1) There is a comprehension of micro and macro. MML defines micro as a section of the system, and macro as the whole system. This definition makes us recall a revival the first distinction by Frisch [1933]. (2) There is a special assumption of connecting various micro structures to the whole (macro) structure in the framework by the loop. However, MML also has a problem of the location of institution in the framework. In other words, it is related to a further question which is how to explain varieties of micro structure. Therefore, we should proceed to focus on the relationship between institution and agent. To explore this subject, this paper picks up Modern Institutional School and Regulation School. Taken in the light of the understanding of agent's action in both schools, I can point out that it has not been explained enough to clear varieties of micro structure in MML. At the end of this paper, it is suggested to the future direction of MML from the view of a positive application to concepts such as 'habit' (Modern Institutional School) and 'habitus' (which is originally discussed by P. Bourdieu, and often referred by Regulation School). Because, it can be thought that these become a help to describing variable interactions among agents or agent's creative action.

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The Japanese economy has suffered from the prolonged recession since the bubble economy collapsed in 1990. The Japanese government adopted the traditional fiscal policy in the mid 90's but the economy did not recover. Neoclassical economists insist that the fiscal policy has no role to stimulate the economy and the marketoriented economic reform which pursues efficiency should be carried out. In fact, reduction of government regulations and promotion of economic liberalization have become a global trend since the 1980s. In Japan, the Koizumi cabinet has carried out economic reform. On the contrary, many Keynesian economists insist that the counter-cyclical fiscal policy has an effect to stabilize the economy. Asada (1987) developed a Kaldorian cycle model which incorporates the budget constraint of government and showed the counter-cyclical fiscal policy is effective to stabilize the economy under certain conditions in the model. Zhang (1990) showed the existence of limit cycles by applying Hopf bifurcation theorem in the model developed by Asada (1987). Ninomiya (2001.a) showed the countercyclical fiscal policy is effective to stabilize the economy even if the economy is in financial instability. However, these studies did not consider the debt burden of firms. In fact, the Japanese economy has suffered from the cumulative interest-bearing debt since the bubble economy collapsed. The problem of the non-performing loan is pointed out as one of the main reasons for the prolonged recession in Japan. Ninomiya (2001.b) took the dynamic equation of debt burden into account and showed a Minskian cycle in a nonlinear dynamic model. However, he did not examine the effect of the counter-cyclical fiscal policy. Asada (2003) and Ninomiya (2005) took the interest-bearing debt into account and discussed the financial instability and cycle. Furthermore, Ninomiya (2005) showed the interest rate target has an effect when the cumulative interest-bearing debt makes the economy unstable. However, both Asada (2003) and Ninomiya (2005) did not examine the effect of the counter-cyclical fiscal policy. In this paper, we shall take both the dynamic equation of debt burden and the budget constraint of government into account in a nonlinear dynamic model and discuss a financial cycle. Furthermore, we shall examine the effect of the counter-cyclical fiscal policy when the cumulative interest-bearing debt makes the economy unstable. The main result of this paper is that the counter-cyclical fiscal policy might not have an effect to make the economy stable when the cumulative interest-bearing debt makes the economy unstable. We might be able to call this situation "debt burden trap." This also means that we could not support the market-oriented economic reform based on neoclassical economics because of the failure of traditional fiscal policy based on Keynesian economics.

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