216 pages | 2 B/W Illus.
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.
Three Major Factors Affecting Features of Financial Systems
Characteristics of Japan’s Financial System and Capitalism
Argument in Brief
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
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
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
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:
James Brassett – Warwick
Eleni Tsingou – Copenhagen Business School
Susanne Soederberg – Queen’s