Japanese Resistance to American Financial Hegemony: Global versus Domestic Social Norms, 1st Edition (Hardback) book cover

Japanese Resistance to American Financial Hegemony

Global versus Domestic Social Norms, 1st Edition

By Fumihito Gotoh


216 pages | 2 B/W Illus.

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Hardback: 9780367345303
pub: 2019-10-01
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This book investigates why the convergence of Japan’s bank-centered financial system to an American-style capital market-based model has lost steam since the mid-2000s, despite financial deregulation during the 1980s and 1990s.

Examining the ideational conflict within Japanese elites between the market liberalization and anti-free market camps, it scrutinizes the American and Japanese credit rating agencies operating in Tokyo and explores the differences between the two major industrial associations, Keidanren and Doyukai, which have played a key role as "ideational platforms" for Japanese corporate society. The book emphasizes the concept of "systemic support", whose broadened definition incorporates dominant elites’ support and protection of subordinates in exchange for the latter’s obedience and loyalty. It argues that Japanese society’s anti-liberal, anti-free market norms centered on systemic support are a form of counter-hegemony, and this has resisted American financial hegemony, promoting international capital mobility and capital markets, and prevented capitalist dominance from severing long-term social ties such as management-labor cooperation and corporate group alliances. Yet this resistance has generated growing problems for Japan.

With a focus on social norms, bureaucracy, credit rating agencies, industrial associations and corporate governance, this book will provide useful insights for scholars and students of international political economy, sociology, cultural studies, and business studies.


"In the 1980s and 1990s financial deregulation was launched with great fanfare in Japan. In this book Gotoh tells an often overlooked story of how these ‘Big Bang’ reforms faltered and US-style capitalism was resisted. It is written with care and precision, highlighting the continuing challenges for Japan and the lessons for us all". - Professor Hugo Dobson, School of East Asian Studies, University of Sheffield, UK.

"The Japanese government enacted substantial financial and corporate governance reforms since the 1980s, yet Japan never converged on the US equity-based financial model. Fumihito Gotoh masterfully unravels this puzzle by demonstrating how the opponents of reform waged an ideological battle against the proponents of neoliberal reforms. They resisted American financial hegemony to preserve valued institutions, such as collaborative labor-management relations and long-term business partnerships." - Professor Steven K. Vogel, Charles and Louise Travers Department of Political Science, University of California, USA.

Table of Contents

1. Introduction

Research Puzzle

Three Major Factors Affecting Features of Financial Systems

Characteristics of Japan’s Financial System and Capitalism

Argument in Brief

Analytical Method

Structure of the Book

2. Networks, Norms, and Alliances

    The Network State View and the Significance of Social Norms

    Gramscian Approaches and Analysis of Culture

    Financial Globalization and the Convergence-Diversity Debate

    Strong and Weak Ties and Prevention and Promotion Orientations

    Guardian and Commercial Morals and the Concept of Systemic Support

    Dominant Elites in Japan and US-Japan Relations

3. Japan’s Financial System and Persistence of Systemic Support

    Japan’s Bank-Centered Financial System and Financial Deregulation

    Systemic Support in the Corporate Sector

    Recent Examples of Major Corporate Bankruptcies and Bailouts

    Corporate Restructuring Funds and Support Measures for SMEs

    Persistent Systemic Support


4. The Politics of the Japanese Credit Rating Industry

    The US Rating Agencies and Financial Globalization

    The Kisaikai Regime and the Development of Local Agencies

    Differences in Rating Agencies between the US and Japan

    The Rise and Fall of the US Agencies’ Power in Japan

    Credit Rating as an Ideational Battlefield


5. Japan’s Ideational Developments and Corporate Governance

    Ideational Conflict within the Japanese Elite

    Industrial Associations Playing the Role of Ideational Platforms

    Growing Influence of Doyukai and Neoliberalism

    Keidanren’s Stakeholder Capitalism versus Doyukai’s Shareholder Capitalism

    Anti-Neoliberal Backlash

    The Robustness of the Japanese Corporate System

    Dynamics between the Equity and Credit Markets


6. The Dilution of Systemic Support and Growing Contradictions

The Dilution of Systemic Support

Growing Contradictions within the 1940 System


7. Conclusion

Financial Globalization and the US Credit Rating Orthodoxy

Systemic Support and Dominant Elites’ Power in CME and LME

Epilogue: Future Prospects of Systemic Support in Japan

About the Author

Fumihito Gotoh is a Teaching and Research Fellow in the Department of Politics and International Relations at the University of Warwick. His research interests include East Asian and Japanese politics and political economies, comparative capitalisms, and the politics and sociology of finance. Previously, he was a senior credit analyst in Tokyo for the Industrial Bank of Japan, Merrill Lynch and UBS.

About the Series

RIPE Series in Global Political Economy

For almost two decades now, the RIPE Series published by Routledge has been an essential forum for cutting-edge scholarship in International Political Economy. The series brings together new and established scholars working in critical, cultural and constructivist political economy. Books in the RIPE Series typically combine an innovative contribution to theoretical debates with rigorous empirical analysis.

The RIPE Series seeks to cultivate:

  • Field-defining theoretical advances in International Political Economy
  • Novel treatments of key issue areas, both historical and contemporary, such as global finance, trade, and production
  • Analyses that explore the political economic dimensions of relatively neglected topics, such as the environment, gender relations, and migration
  • Accessible work that will inspire advanced undergraduates and graduate students in International Political Economy.

James Brassett – Warwick

Eleni Tsingou – Copenhagen Business School

Susanne Soederberg – Queen’s

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