Chapter

The Neoliberal Regime and its Possible Crisis: A Reflection from the Viewpoint of Institutional Change: The Japanese Experience

Authors:
To read the full-text of this research, you can request a copy directly from the author.

Abstract

After the Lehman Shock of 2008 and the ensuing global financial crisis, many political economists have pointed out the limitations of neoliberalism and market fundamentalism or confirmed a crisis of finance-led capitalism. Today, however, almost 10 years after the Shock, neoliberal ideas and policies, including political control being exercised by Wall Street in the United States, seem to be as dominant as ever in spite of their serious failures. It also does not seem that the form of capitalism dominated by finance has disappeared. Worse still, we may now be witnessing a new wave of chauvinism and trade protectionism, especially in the US and some of the countries belonging to the EU. Are there any signs of the sprouting of strong new politico-economic systems or ideas that will replace those of neoliberalism? Ten years after the shock, frankly speaking, it is difficult for us to be sure about the direction in which the current regime is evolving. We must therefore consider both the tenaciousness and variability of institutions and regimes. This leads us to the question of what determines institutional change and how it occurs.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the author.

ResearchGate has not been able to resolve any citations for this publication.
Book
The Liberal Democratic Party, which dominated postwar Japan, lost power in the early 1990s. During that same period, Japan's once stellar economy suffered stagnation and collapse. Now a well-known commentator on contemporary Japan traces the political dynamics of the country to determine the reasons for these changes and the extent to which its political and economic systems have been permanently altered. T. J. Pempel contrasts the political economy of Japan during two decades: the 1960s, when the nation experienced conservative political dominance and high growth, and the early 1990s, when the "bubble economy" collapsed and electoral politics changed. The different dynamics of the two periods indicate a regime shift in which the present political economy deviates profoundly from earlier forms. This shift has involved a transformation in socioeconomic alliances, political and economic institutions, and public policy profile, rendering Japanese politics far less predictable than in the past. Pempel weighs the Japanese case against comparative data from the United States, Great Britain, Sweden, and Italy to show how unusual Japan's political economy had been in the 1960s. Regime Shift suggests that Japan's present troubles are deeply rooted in the economy's earlier success. It is a much-anticipated work that offers an original framework for understanding the critical changes that have affected political and economic institutions in Japan.
Book
Neoliberalism--the doctrine that market exchange is an ethic in itself, capable of acting as a guide for all human action--has become dominant in both thought and practice throughout much of the world since 1970 or so. Writing for a wide audience, David Harvey, author of The New Imperialism and The Condition of Postmodernity, here tells the political-economic story of where neoliberalization came from and how it proliferated on the world stage. Through critical engagement with this history, he constructs a framework, not only for analyzing the political and economic dangers that now surround us, but also for assessing the prospects for the more socially just alternatives being advocated by many oppositional movements.
Book
In this innovative book, Hideko Magara brings together an expert team to explore both the possibilities and difficulties of transitioning from a neoliberal policy regime to an alternative regime through drastic policy innovations. The authors argue that, for more than two decades, citizens in developed countries have witnessed massive job losses, lowered wages, slow economic growth and widening inequality under a neoliberal policy regime that has placed heavy constraints on policy choices.
Article
This essay explores the question of how formal institutions change. Despite the importance assigned by many scholars to the role of institutions in structuring political life, the issue of how these institutions are themselves shaped and reconfigured over time has not received the attention it is due. In the 1970s and 1980s, a good deal of comparative institutionalist work centered on comparative statics and was concerned with demonstrating the ways in which different institutional arrangements drove divergent political and policy outcomes (e.g., Katzenstein 1978). In addition, scholarship in the comparative historical tradition has yielded important insights into the genesis of divergent (usually national) trajectories. Works in this vein include some classics such as Gerschenkron (1962), Moore (1966), and Shefter (1977), but also significant recent contributions such as Collier and Collier (1991), Skocpol (1992), Spruyt (1994), Ertman (1997), Gould (1999), and Huber and Stephens (2001). Finally, we have a number of analyses that address the issue of “feedback mechanisms” that are responsible for the reproduction of various institutional and policy trajectories over time (e.g., Pierson 1993; Skocpol 1992; Weir 1992b). Ongoing theoretical work centering on the concept of path dependence by Mahoney, Pierson, and others has lent greater precision to previous formulations based on the dual notions of “critical junctures” and “historical trajectories” (Mahoney 2000; Pierson 2000a). As these authors have shown, some of the major works in comparative historical analysis can be read as illustrations of path dependence in social and political development.
Article
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)
Article
What are the forces that make relatively and transitorily coherent the institutional configurations of capitalism? In response to the literature on the variety of capitalisms, this article investigates the relative explanatory power of various hypotheses: institutional complementarity, institutional hierarchy, coevolution, simple compatibility or isomorphism. Compatibility is too often confused with complementarity and it is frequently an ex post recognition, rarely an ex ante design. Both hybridization and endometabolism are the driving forces in the transformation of institutional configurations. Uncertainty and the existence of some slack in the coupling of various institutions are key features that call for the mixing of various methodologies in order to detect complementarities. This framework is then used in order to show that three distinct institutional complementarities are at the origin of the more successful national economies since the 90s. Thus, institutional diversity is being recreated and the existence of complementarities plays a role in this process.
Article
The political-economic institutions that have traditionally reconciled economic efficiency with social solidarity in the advanced industrial countries, and specifically in the so-called ‘coordinated market economies’, are indisputably under pressure today. However, scholars disagree on the trajectory and significance of the institutional changes we can observe in many of these countries, and they generally lack the conceptual tools that would be necessary to resolve these disagreements. This article attempts to break through this theoretical impasse by providing a framework for determining the direction, identifying the mode, and assessing the meaning of the changes we can observe in levels of both economic coordination and social solidarity.
Book
Capitalist economies have developed with a fair amount of diversity among themselves, which should have resulted in dramatic differences in levels of development. The fact that these differences are for the most part not noticeable may indicate that capitalism is based on such robust mechanisms that it accommodates varied institutional environments. In other words, institutional differences would be akin to national folklore, with few if any consequences for economic dynamics. If institutional specificities did have an effect, competition among nations would sooner or later lead to the adoption of international 'best practices'. This book challenges these views on several counts. There are some elements of truth in the statement that differences in macroeconomic policy mix could explain in part the differences in economic performance. But this does not amount to saying that institutional specificities do not matter in explaining important differences in the basic economic mechanisms of the different countries. There is a considerable amount of theoretical and historical work that insists on the central role of institutions in economic dynamics.
Article
Cet article cherche a determiner a quels types d'evenements historiques s'applique l'analyse de path dependence. Selon l'A., il s'agit de sequences historiques au sein desquelles des evenements contingents mettent en mouvement des modeles institutionnels ou des chaines d'evenements ayant des proprietes deterministes. L'identification de la path dependence implique a la fois de relier un resultat a une serie d'evenements et de montrer en quoi ces evenements sont eux-memes des occurences contingentes ne pouvant etre expliquees par des conditions historiques prealables. Ces sequences historiques sont generalement de deux types : les sequences a auto-renforcement et les sequences reactives
Article
It is increasingly common for social scientists to describe political processes as "path dependent." The concept, however, is often employed without careful elaboration. This article conceptualizes path dependence as a social process grounded in a dynamic of "increasing returns." Reviewing recent literature in economics and suggesting extensions to the world of politics, the article demonstrates that increasing returns processes are likely to be prevalent, and that good analytical foundations exist for exploring their causes and consequences. The investigation of increasing returns can provide a more rigorous framework for developing some of the key claims of recent scholarship in historical institutionalism: Specific patterns of timing and sequence matter; a wide range of social outcomes may be possible; large consequences may result from relatively small or contingent events; particular courses of action, once introduced, can be almost impossible to reverse; and consequently, political development is punctuated by critical moments or junctures that shape the basic contours of social life.
Article
This book contributes to emerging debates in political science and sociology on institutional change. Its introductory essay proposes a new framework for analyzing incremental change that is grounded in a power-distributional view of institutions and that emphasizes ongoing struggles within but also over prevailing institutional arrangements. Five empirical essays then bring the general theory to life by evaluating its causal propositions in the context of sustained analyses of specific instances of incremental change. These essays range widely across substantive topics and across times and places, including cases from the United States, Africa, Latin America, and Asia. The book closes with a chapter reflecting on the possibilities for productive exchange in the analysis of change among scholars associated with different theoretical approaches to institutions.
Article
How can we determine when an existing institutional path or trajectory is ending and being replaced with a new one? How does such a process take place? How can we distinguish between institutional innovation within an existing trajectory and a switchover to a new trajectory or path? This paper explores these questions by examining the pattern of institutional change in the German financial system. The paper advances four theoretical claims: First, that endogenous developments can disrupt an institutional path and lead to a new one. Second, that an event sequence involving a move to a new institutional path may not follow from a contingent event yet may nonetheless be marked by increasing returns processes. Third, that increasing returns in politics are not automatic and must be cultivated by actors in order to be realized. Finally, that the concept of path is still in need of a measurable conceptualization before any further advances in path dependent arguments can be made. Wie lässt sich bestimmen, wann ein bestehender institutioneller Pfad endet und durch einen neuen ersetzt wird? Wie vollzieht sich ein solcher Prozess? Wie kann zwischen einer institutionellen Innovation im Rahmen einer bestehenden Trajektorie und dem Wechsel zu einem neuen Pfad unterschieden werden? Zur Beantwortung dieser Fragen werden die Muster des institutionellen Wandels im deutschen Finanzsystem untersucht. Dabei werden vier Thesen aufgestellt. Erstens: Endogene Entwicklungen können dazu führen, dass ein institutioneller Pfad unterbrochen und durch einen neuen abgelöst wird. Zweitens: Eine Ereignisfolge, die eine Hinwendung zu einem neuen institutionellen Pfad nach sich zieht, muß nicht unbedingt durch ein kontingentes Ereignis ausgelöst werden, kann aber gleichwohl auf positiven Rückkopplungen und wachsenden Skalenerträgen beruhen. Drittens: Solche Skaleneffekte entstehen in der Politik nicht automatisch, sondern müssen von den Akteuren aktiv gefördert und kultiviert werden. Schließlich: Das Konzept der Pfadabhängigkeit bedarf nach wie vor einer messbaren Konzeptualisierung, bevor weiterführende Thesen im Rahmen dieses Ansatzes formuliert werden können.
Article
Debates surrounding institutional change have become increasingly central to Political Science, Management Studies, and Sociology, opposing the role of globalization in bringing about a convergence of national economies and institutions on one model to theories about ‘Varieties of Capitalism’. This book brings together a distinguished set of contributors from a variety to examine current theories of institutional change. The chapters highlight the limitations of these theories, finding them lacking in the analytic tools necessary to identify the changes occurring at a national level, and therefore tend to explain many changes and innovations as simply another version of previous situations. Instead a model emerges of contemporary political economies developing in incremental but cumulatively transformative processes. The contributors shoe that a wide, but not infinite, variety of models of institutional change exist which can meaningfully distinguished and analytically compared. They offer an empirically grounded typology of modes of institutional change that offer important insights on mechanisms of social and political stability, and evolution generally. Beyond Continuity provides a more complex and fundamental understanding of institutional change, and will be important reading for academics, researchers, and advanced students of Political Science, Management Studies, Sociology and Economics.
Down the Wrong Path: Path Dependence, Markets, and Increasing Returns,’ Unpublished Manuscript
  • Herman Schwartz
  • H Schwartz
Une théorie du capitalisme est-elle possible
  • Robert Boyer
  • R Boyer
Formalising Regulationist Dynamics and Crises
  • Frédéric Lordon
Supercapitalism: The Battle for Democracy in an Age of Big Business
  • Robert B Reich
  • RB Reich
Second Paperback Edition 2001) The Great Transformation: The Political and Economic Origins of Our Time
  • Karl Polanyi