The developmental state built after WWII has been blamed for Japan’s “lost decade” of the 1990s. The Japanese government takes a lot of structure reforms in politics and economics. This article examines how the two- important traditional structures of Japanese developmental state that were named as the engines of postwar economic successes were transformed by reforms. The first is so called “convoy system” financial regulation: the powerful ministry Okurasho with this system protected the financial communities. The second is the mainbank system, a product of the financial communities sharing risks with each other and special communication between banks and enterprises. Some scholars claim that the Japanese developmental state is transforming to the Anglo-American style, namely regulatory states, This article finds that the style of Japan’s financial regulation tends toward a regulatory state, and the mainbank system is wearing away due to the decline of shares cross-holding between banks and enterprises. However, banks and business groups have not abandoned their traditional close relationships entirely but tries to remain. The author argues that the western style reforms have induced into Japan’s financial institutions, but the legacies of developmental state are still present. In other words, currently it has not been witnessed an established regulatory state in Japan because the old institutions are resisting the new changes.
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