Globalization and the Politics of Institutional Reform in Japan

Globalization and the Politics of Institutional Reform in Japan

Motoshi Suzuki

Globalization and the Politics of Institutional Reform in Japan illuminates Japan’s contemporary and historical struggle to adjust policy and the institutional architecture of government to an evolving global order. This focused and scholarly study identifies that key to this difficulty is a structural tendency towards central political command, which reduces the country’s capacity to follow a more subtle allocation of authority that ensures political leadership remains robust and non-dictatorial. The author argues that it is essential for a globalizing state to incorporate opposition parties and transgovernmental networks into policy-making processes. Providing an in-depth analysis of the theories of institutional change, this book introduces readers to a wealth of perspectives and counterarguments concerning analysis of political decision-making and policy adjustment on both the national and international scale.

Chapter 6: Council politics for regulatory reforms on corporate governance and labor relations

Motoshi Suzuki

Subjects: asian studies, asian law, asian politics and policy, economics and finance, economic psychology, political economy, law - academic, asian law, politics and public policy, asian politics, political economy


Regulatory reform is a prominent aspect of the globalization agenda in the early twenty-first century. As the international order has shifted from embedded liberalism to neoliberalism, non-liberal states with arrangements of coordinated market economy (CME) are pressured to adjust their policy domains to market-oriented ones in order to enable their firms to operate competitively in international markets where liberal practices are increasingly common (Gilson, 2001; Hansmann and Kraakman, 2001). The United States and the United Kingdom, major liberal market economies (LMEs), have strengthened stockholder-centric corporate governance and flexible labor contracts based on the principle of profit maximization since the 1980s. Germany, which has long embraced the CME principle of co-determination, underwent market-consistent reform under the Schröder Social Democratic government in an attempt to revive its stagnant economy after unification. It adopted a liberal Corporate Governance Code stressing managerial transparency and stockholder rights, while legalizing work sharing and dismissal with severance pay. Finally, the Organisation for Economic Co-operation and Development (OECD) adopted the OECD Principles of Corporate Governance in 1999 (revised in 2004), which stressed stockholder rights and disclosure, and pushed for a reform for flexible labor markets to accommodate rapid technological changes and enhanced production cycles.

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