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Political Economy of Trade Liberalization: The Case of Postwar Japan

Author

Listed:
  • Megumi Naoi

    (Department of Political Science, University of California, San Diego)

  • Tetsuji Okazaki

    (Faculty of Economics, University of Tokyo)

Abstract

　　 How did post-War newer democracies, whose governments faced both pressures from vested special interests and vo ters, 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

  • Megumi Naoi & Tetsuji Okazaki, 2013. "Political Economy of Trade Liberalization: The Case of Postwar Japan," CIRJE F-Series CIRJE-F-898, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2013cf898
    as

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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2013/2013cf898.pdf
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    References listed on IDEAS

    as
    1. Harrison, Ann (ed.), 2007. "Globalization and Poverty," National Bureau of Economic Research Books, University of Chicago Press, number 9780226318004.
    2. 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.
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    Cited by:

    1. Kiyota, Kozo & Okazaki, Tetsuji, 2016. "Assessing the effects of Japanese industrial policy change during the 1960s," Journal of the Japanese and International Economies, Elsevier, vol. 40(C), pages 31-42.

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