The Influence of Business on Japanese Policy Making

As firms have become more interlinked with the world economy, it is hypothesized that they have increased their interest in open trade and liberal economic policies. This hypothesis, it is suggested, has a broad validity in the sense that economic interdependence has affected advanced market industrial economies similarly. This study tests the hypothesis in the Japanese context. In the study, corporate preferences are argued to be a pivotal factor affecting commercial policy. These preferences translate into policy through a political process in which various actors compete to achieve their policy objectives. Accordingly, it is necessary to understand the policy-making structures in which corporate preferences are transformed into policy outcomes. Close business-government relations in policy making and the existence of powerful peak business federations and industrial associations constitute distinctive features of the Japanese political economy. These features are likely to affect the formation of corporate preferences and their influence on commercial policy, and need to be spelt out.