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Political Economy of Trade Liberalization: The Case of Postwar Japan

Author

Listed:
  • Naoi, Megumi
  • Okazaki, Tetsuji

Abstract

How did post-War newer democracies, whose governments faced both pressures from vested special interests and voters, achieve trade liberalization ? Exploiting the case of trade liberalization in 1960s Japan, this paper addresses this question. Because the benefits and costs of trade liberalization are unequally distributed among the population, generating winners and losers, trade liberalization is inherently a highly political issue. The Japanese government and the LDP leaders used two tactics to build a coalition of legislators for trade liberalization. While they used sequencing of liberalization to buy off support from legislators of the Upper-House, they relied on side-payments for legislators of the Lower-House. This strategy choice was consistent with the difference in the sizes of electoral districts between the Upper-House and the Lower-House.

Suggested Citation

  • Naoi, Megumi & Okazaki, Tetsuji, 2013. "Political Economy of Trade Liberalization: The Case of Postwar Japan," PRIMCED Discussion Paper Series 49, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:primdp:49
    as

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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/26097/No49-dp.pdf
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    References listed on IDEAS

    as
    1. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336, National Bureau of Economic Research, Inc.
    2. Harrison, Ann (ed.), 2007. "Globalization and Poverty," National Bureau of Economic Research Books, University of Chicago Press, number 9780226318004, December.
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    More about this item

    Keywords

    political economy; trade liberalization; democracy; side-payments; Japan;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East

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