"Financial Globalisation and the Opening of the Japanese Economy"

by James D. Malcolm

Reviewed by Takahiro Miyao (GLOCOM)

Review:

From its title, "Financial Globalisation and the Opening of the Japanese Economy," one could expect a typical reformist view or a convergence theorist's view as the main position of this book. Actually, that is not the case, and the author takes a "pluralist" approach, comparing various approaches to the subject matter.

The author tries to do three things: "(i) establish an understanding of the substance of financial globalization and (ii) identify the state of the current debate concerning its impact on national regulatory, corporate and social structures, before (iii) empirically mapping the case of Japan in each of these three areas."

One of the conclusions in the book is that Japan's financial system has been globalized only gradually because of Japan's political as well as social systems. Japan's financial system cannot change over night, even though "Big Bang" along with various deregulation measures has been taking place at least on the surface. There appears to be nothing new in this conclusion, but what is interesting about the pluralist approach is that no moral judgment is made regarding Japan's gradualism. Instead, the author objectively states that "the country is continuing to seek a 'middle way' between the traditional Japanese financial model and a cutting-edge Anglo-American financial model."

Of course, one might doubt if Japan could afford to take a 'middle way' in this age of global competition, but at least it is refreshing to read a book on Japan's financial globalization based on objective data rather than subjective value judgment. The author's stance is quite clear as he expresses his hope that "the empirical research gathered constitutes a contribution to the data available to scholars seeking to understand Japan's political economy in general, and the country's current Big Bang programme of financial deregulation in particular."