Japanese Foreign Economic Policy Formation: Explaining the Reactive State

The concept of the “reactive state” is useful in understanding the foreign economic policy behavior of Japan and certain other middle-range powers deeply integrated in the global political economy, particularly during periods of economic turbulence when international regimes do not fully safeguard their economic interests. The essential characteristics of the reactive state are two-fold: (1) it fails to undertake major independent foreign-policy initiatives although it has the power and national incentives to do so; (2) it responds to outside pressure for change, albeit erratically, unsystematically, and often incompletely. In the Japanese case, reactive state behavior flows from domestic institutional characteristics as well as from the structure of the international system. Domestic features such as bureaucratic fragmentation, political factionalism, powerful mass media, and the lack of a strong central executive have played an especially important part in Japanese financial, energy, trade, and technology policy formation since 1971.