The Politics of Restructuring

―Agendas and Uncertainty in Japan's Electricity Deregulation―

November 25, 2009 6:00 PM (finished)


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Paul J. Scalise, Ph.D.

(Adjunct Fellow at the Institute of Contemporary Japanese Studies at Temple University, Japan Campus)

Date/Time November 25, 2009 6:00 PM
Location Room 549 5th floor, Akamon Sogo Kenkyuto Institute of Social Science, University of Tokyo  [map]
Abstract The revision to the Electric Power Industry Law (Denki jigyō hō, hereafter the Law) in 1995 was the first comprehensive revision of the Japanese electric power industry's legislation since 1964. Two further revisions would be made to the Law—the first in 1999 and the second in 2003. Despite little change in real electricity prices since 1995 (the primary objective), restructuring of the industry eventually fell off the national agenda by 2007. Indeed, what started as an effort to inject pro-competitive deregulation into the industry ended with an almost equally adamant decision to halt the reform process altogether. How and why did such a diffuse public interest like electric power deregulation initially prevail by getting on the national agenda in the early 1990s, only then to face such an unusual degree of skepticism and resistance fifteen years later? This presentation discusses the politics behind the puzzle. The conventional wisdom among social scientists points to either powerful career bureaucrats and self-interested politicians or an organized legion of vested interests “buying up" regulations, thereby hindering diffuse consumer-oriented change. In this presentation, Paul Scalise analyzes the fine balance between two conflicting images of Japan’s energy policy subsystem ("security" versus "efficiency") as actors engaged in structural reform. Unlike previous power-dependence models, heretofore-unexamined archival documents, microeconomic data, and qualitative interviews with key actors are used to test for an additional possibility of policy change: the infiltration of foreign ideas. Periods of stasis (controlled by negative feedback) in terms of rhetoric, imagery, government-business cooperation, and economic ideas are occasionally known to be offset by bouts of frenetic institutional change. Variations in deliberation timetables, shifting voting patterns in committees, sporadic law promulgation, increasingly negative public opinion polls, and fluctuating media attention cycles (the dependent variables) are analyzed by using the ubiquity, consistency, and strength of foreign economic ideas and events (the independent variables) to explain the transformation of both formal (regulatory/legislative) and informal (normative) institutions in Japan.
Bio Paul J. Scalise (D.Phil., Politics, University of Oxford, 2009) is Adjunct Fellow at the Institute of Contemporary Japanese Studies at Temple University, Japan Campus. A former Senior Associate at Cambridge Energy Research Associates (CERA), he worked as a financial analyst in Tokyo covering Japanese energy companies for Dresdner Kleinwort Wasserstein, Japan Ltd. and UBS Global Asset Management. His work has been funded in part by the Toshiba International Foundation, Japan Foundation Endowment Committee, and other organizations. Among his professional activities, he served as professorial lecturer at Sophia University and contributing analyst for Oxford Analytica.