Japan enjoys a free market economy. Like most modern, industrial societies, Japan's market structure is a mix of monopolistic competition, in which a large number of smaller firms with slightly differentiated products compete for market share, and an oligopoly, in which a small number of firms dominate the market.
As a result of long economic stagnation, Japanese consumers prefer value-for-money products, and the number and variety of discount stores has increased. By eliminating intermediaries in the distribution channel, discount stores, category killers, power centers, hypermarkets, clearance stores, outlet stores, dollar discount chain stores, home centers and wholesale clubs have garnered an ever-enlarging share of the consumers' spending power.
The Japanese government has been blamed for interfering in the country's economy and market in ways that have ultimately hampered the economy and distorted the market. For example, government contracts accounted for 25 percent of the construction industry between 2001 and 2004; according to economics professor and author Benjamin Powell, "[b]y keeping otherwise unviable construction companies in business, the government has hindered the market's adjustment process by maintaining a capital structure that does not reflect consumers' desires."