Organizer and Chair: Ulrike Schaede, University of California, San Diego Discussant: Frank Upham, New York University
This panel aims to investigate ongoing and potential future changes in the Japanese political economy, and how change may threaten the state's capabilities of governing. Is there really a shift in power and attitudes from state to society and business? If yes, how does this affect the traditional image and the operations of the postwar Japanese state and its governance system? Do these changes follow certain patterns that allow for systematic analysis?
Corruption and Democracy in Japan
Susan J. Pharr, Harvard University
This paper explores the issue of corruption and political ethics in Japan in comparative perspective. Focusing on the post-1993 period, it draws on focus group data collected in Japan in 1996 to look at what people today in Japan expect of their leaders, both politicians and bureaucrats. Along with the other papers on the panels, it seeks to explore changes under way in the post-1993 era, in particular focusing on the impact of political reforms on ordinary people's perceptions of democracy in Japan.
Structural Gaiatsu: International Financial Movements and Domestic Political
Change
T. J. Pempel, University of Washington
Since 1971, and with increased intensity since 1985, the Japanese yen has appreciated considerably. The result has been to force a number of changes in Japanese politics, centering around the difficulty of holding the longstanding conservative coalition together. Much of this pressure has been the consequence of moves of Japanese companies abroad and their increased ability to raise capital in multiple venues, outside the aegis of MOF/Bank of Japan supervision.
Deregulation and the Japanese Firm
Ulrike Schaede, University of California, San Diego
This paper investigates the consequences of deregulation for corporate behavior and industrial performance in Japan. A firm's behavior is determined by its financial arrangements, product market competition (including habits and customs in the firm's trading relationships which have over time become de facto rules), and government guidance. We analyze the mechanisms of corporate control, how they interact with each other, and how deregulation will change this system of corporate control. Since it is a system, changes in one area can lead to unforeseen and possibly deleterious effects elsewhere. How should deregulation be sequenced to avoid negative outcomes? We also ask whether the financial and product market mechanisms are based on a closed market and therefore will slowly disappear with continuing deregulation, or whether these mechanisms are purely private-sector arrangements and as such are immune to official deregulation and market-opening measures.