The Political Economy of the Japanese Financial Big Bang Institutional Change in Finance and Public Policymaking

by Toya, Tetsuro; Amyx, Jennifer A.

• ISBN13: 9780199292394
• ISBN10: 0199292396
• Format: Hardcover
• Copyright: 2006-06-01
• Publisher: Oxford University Press

Summary

This book emphasizes change over continuity in Japanese policymaking. It argues that Japan's Big Bang financial reforms emerged out of a policymaking process that deviated radically from past patterns. Performance failures, scandals and fluidity in party politics led the Ministry of Finance to promote reforms that otherwise would have been opposed.

Author Biography

The late Tetsuro Toya obtained his PhD from Stanford University in 2000. He completed his undergraduate studies at Tokyo University. He has held positions in the Secretarial Division, Minister's Secretariat, Ministry of Finance and was a Visiting Fellow at the Research Institute of Economy, Trade and Industry (RIETI).

Table of Contents

List of Figures	xvi
List of Tables	xvii
List of Abbreviations	xviii
1. Did Japanese Politics Change in the 1990's?	1	(22)
Change or Continuity?	1	(6)
Research Puzzles	7	(3)
Methodological Approach and Theoretical Framework	10	(3)
Argument in Brief	13	(5)
Structure of the Book	18	(5)
Part I. Analytical Framework
2. A Rational Actor Approach	23	(23)
Three Contentious Issues in Japanese Politics	23	(10)
Works on Japanese Financial Politics and the Big Bang	33	(3)
The Study's Methodological Approach and Research Design	36	(6)
Possible Alternative Explanations	42	(4)
3. How do Systems Change?: Actors, Preferences, Strategies, and Institutions in Financial Politics	46	(56)
Introduction of conceptual tools for institutional analysis	46	(5)
A Theoretical Framework for Institutional Change	51	(7)
The Dynamics of Organizational Survival	58	(2)
State Actors (1)—Political Parties	60	(3)
State Actors (2)—Bureaucratic Agencies	63	(5)
Societal Actors (1)—Firms and Interest Groups	68	(3)
Societal Actors (2)—The Public	71	(4)
Institutions in Japanese Financial Politics (1)—Bureaupluralism in Public Policymaking	75	(12)
Institutions in Japanese Financial Politics (2)—The Financial "Convoy"	87	(8)
Scenarios of Financial Reform	95	(7)
4. Expected Economic Implications of the Big Bang	102	(51)
Background to the Big Bang Plan	102	(16)
Basic Concepts of the Financial Big Bang Plan: Principles, Pace, and Sequence	118	(3)
Concrete Policies Included in the Financial Big Bang	121	(7)
Expected Economic Consequences of the Big Bang	128	(4)
"Winners" and "Losers" of the Big Bang	132	(15)
Conclusion	147	(6)
Part II. Analysis of Financial Politics
5 A Political Analysis of the Emergence of the Big Bang Initiative	153	(36)
Balancing the Interests of Support Constituents and the General Public	154	(2)
Who Brought about the Big Bang?	156	(11)
Developments within MOF related to the "Big Bang"	167	(4)
Developments within the LDP related to the Big Bang	171	(5)
Summary: Who Brought about the Big Bang?	176	(1)
Organizational Level Evaluation	177	(5)
Integrating the Suborganizational and Organizational Levels of Analysis	182	(1)
Assessment against Competing Explanations	183	(4)
Conclusion	187	(2)
6. The Financial Industry and the Big Bang	189	(31)
Two political paths to economic reform	190	(1)
Developments following the Prime Minister's Initiative	191	(11)
Summarizing the Narrative	202	(4)
Three Previous Cases of Financial Reform	206	(6)
Comparing the Financial Big Bang to Past Financial Reforms	212	(2)
Why was the Financial Industry Unable to Stop the Big Bang?	214	(5)
Conclusion: The Big Bang as a Victory by the "Political Winners"	219	(1)
7. New Developments in Bureaupluralism: Comparing and Contrasting the Big Bang to the 1998 "Financial Diet"	220	(31)
New Developments in Bureaupluralism emerging out of the Financial Big Bang	221	(3)
Comparing and Contrasting the Big Bang with the Fall 1998 "Financial Diet"	224	(9)
New Patterns in Financial Policymaking	233	(1)
Public Support as a Determinant in Financial Politics	234	(8)
Comparison with Alternative Explanations	242	(5)
Conclusion	247	(4)
Part III. The Meaning of Change
8. Two Institutional Changes	251	(35)
Review: Conceptualizing Institutions and Characteristics of Two Key institutions in Japanese Finance	252	(3)
What Drives "Institutional Change"? Reexamining the Context of Japanese Financial Politics	255	(9)
Relating the Big Bang to Broader Changes in Finance	264	(10)
Institutional Change in Finance: Collapse of the Financial Convoy	274	(2)
Institutional Change in Public Policymaking: The Decay of Bureaupluralism	276	(7)
Conclusion	283	(3)
9. Conclusion	286	(25)
Insights into Regulatory Reform in Other Contexts	290	(1)
Implications for Economic Reforms in Other Policy Areas	291	(13)
Policy Implications	304	(5)
Further Issues	309	(2)
Appendix	311	(1)
References	312	(11)
Index	323