Cooperative Capitalism: Self-Regulation, Trade Associations, and the Antimonopoly Law in Japan

After 50 years of fast economic growth, Japan’s developmental state has outlived its usefulness. Industries that can be nourished through industrial policy alone will not be sufficient to sustain the country’s growth into the 21st century. As the Japanese government becomes less central and deregulation continues, some propose that Japan’s markets must surely become more open to foreign competition. But is this necessarily the case? Where is quote;post-developmentalquote; Japan really headed?

        Schaede argues that Japan is on its way to a cooperative market system based on self-regulation by trade associations; i.e., independent rule-making by the industries themselves. As the strong state declines and deregulation proceeds absent the establishment of a large number of truly independent supervisory regulatory agencies, industries are assuming the role of formulating and enforcing their own rules. While this is a major change within Japan, the net result for the world economy is that many Japanese markets will not become more open and accessible to foreign competition. The implications of self-regulation for Japanese industry are mixed: while internationally competitive firms can use self-regulation to compete even more aggressively, many domestic industries continue to operate under potentially stifling self-protection.

        In her talk, Schaede will outline the basic logic of this argument and present evidence from Japan’s record of postwar antitrust enforcement. A detailed study of all antitrust cases ever pursued in Japan reveals that most activities of self-regulation, other than outright price fixing, are considered acceptable. Therefore, even if Japan’s Fair Trade Association wanted to contain increasing self-regulation, enforcement would be frustrated by the country’s existing legal doctrine.

Ulrike Schaede is Associate Professor at IR/PS — the Graduate School of International Relations and Pacific Studies at the University of California, San Diego. Between 1983 and the present, she has spent a total of five years of study and research in Japan. During this period, she has held affiliations at Hitotsubashi University as well as numerous government institutions and think tanks in Tokyo. Previous teaching and research affiliations include the Philipps-Universitaet Marburg (Germany), the Haas School of Business at UC Berkeley, and the Harvard Business School.