Success in Public Spending Cuts Turns to Japan Rebound Snag

After years of criticism for public-works spending that rewarded political constituents at the cost of adding debt, Japan succeeded in cutting the largesse in half. Now, that legacy of success is hampering an economic rebound.

Reconstruction bids are going unmet one year after the earthquake that devastated the northeast region, because builders lack resources to fill them. Builders’ payrolls fell 24 percent nationwide in the decade through March 2011. Sendai, where the airport was wrecked by the post-quake tsunami on March 11, has 14 ready-mix cement factories, compared with 30 in 1998.