Redirecting Japan's Multi-Level Governance

CORPORATE GOVERNANCE IN CONTEXT: CORPORATIONS, STATE, AND MARKETS IN EUROPE, JAPAN, AND THE U.S., Klaus J. Hopt, Eddy Wymeersch, Hideka Kanda, Harald Baum, eds., pp. 571-598, 2005

Sydney Law School Research Paper No. 07/12

29 Pages Posted: 8 Feb 2006

See all articles by Luke R. Nottage

Luke R. Nottage

The University of Sydney Law School; The University of Sydney - Australian Network for Japanese Law

Abstract

Japan Inc's regulatory state has begun to unravel, as deregulation has accelerated over the 1990s, but sometimes novel and hybrid forms of re-regulation are also revealed in this process. Models and ideologies of law are associated with each of these paradigms: welfare statism (for regulation), outright neo-liberalism (for hard-core deregulation), and neo-proceduralism (underpinning re-regulation). This paper takes issue with the iconoclastic neo-liberal agenda pursued especially by J. Mark Ramseyer, often in association with two University of Tokyo professors. He purports to have disproved conventional wisdom by showing empirically that that postwar Japan was in fact already characterised by perfectly functioning markets and narrowly self-interested socio-economic actors. Yet, Ramseyer's work comes with a normative impulse and the hope that extreme deregulation thus will be advanced and realised. Instead, this paper counterposes two variants within the neo-proceduralist paradigm capable of providing a theory to both describe and justify certain re-regulatory phenomena. One is a more dialogic liberal model (drawing partly on Habermas) promoted by the politically influential legal philosopher, Shigeaki Tanaka; and the second is the postmodern communitarian approach of his legal sociologist colleague at Kyoto University, Takao Tanase.

From this basis, the paper argues that Japan should learn from and develop EU-like regional arrangements in order to add new dimensions to its regulatory apparatus. On the one hand, for example, this would build up capacity for more effective and legitimate harmonization relating to a range of complex human and animal health risks nowadays, such as mad cow disease. On the other, it would provide extra underpinning for other aspects of Japan's ongoing program of economic liberalization that do not directly implicate such risks or constraints, since reducing - but not necessarily totally dismantling all - barriers to trade and investment has been a primary force behind the remarkable European Union project. Japan has long experience in developing, and (to a lesser extent) legitimizing, multi-level governance processes at least within its borders, but is should now redefine and redirect its multi-level governance system to include a new external dimension. One possibility is to add clearer provisions on regulatory harmonization and develop new EU-like institutions - or at least processes - within Japan's recent bilateral arrangements, particularly in the Asia-Pacific region.

Keywords: Corporate governance, regulation, Japan, comparative law

Suggested Citation

Nottage, Luke R., Redirecting Japan's Multi-Level Governance. CORPORATE GOVERNANCE IN CONTEXT: CORPORATIONS, STATE, AND MARKETS IN EUROPE, JAPAN, AND THE U.S., Klaus J. Hopt, Eddy Wymeersch, Hideka Kanda, Harald Baum, eds., pp. 571-598, 2005; Sydney Law School Research Paper No. 07/12. Available at SSRN: https://ssrn.com/abstract=880403

Luke R. Nottage (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

The University of Sydney - Australian Network for Japanese Law

Room 640, Building F10, Eastern Avenue
Sydney, NSW 2006
Australia

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