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Notes -
The question is, why do the strengths and problems seem to balance out so much? If you have multiple independent factors, then the total variance sets an upper limit on the effect size of individual factors. So whenever someone says that a factor like housing or regulation or something else that some countries already get right, has a huge potential for economic growth, I look at the small variance between first-world countries, and conclude that either the factor doesnt have that much of an effect, or theres some sort of interaction effect that eats away most of the first-order-effect.
So, I found your claim that Japan actually is doing much better in the whole economy very interesting.
Most of it is within a factor of 2, which corresponds to about 30 years of economic development - and the bigger ones grow slower.
My beef is with the claim that this is keeping the whole economy down.
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