An Outline of the “Reconsidering Governance” Project

Institute-wide Joint Research Project of the Institute of Social Science (ISS), the University of Tokyo

Many issues confronting the present-day world are condensed into debates on governance.  The term “governance” became commonplace in Japan from the mid-1990s: “corporate governance” to discuss corporate scandals or management efficiency, “good governance” regarding the effectiveness of aid for developing countries, and “welfare governance” or “local governance” in the context of trying to find solutions to the stalemate of the welfare state.  Many of those issues have been examined in Shaken’s recent institute-wide joint research projects, “The Lost Decade?,” “Comparative Regionalism,” and “The Social Sciences of Hope.”  In this current research project, we reconsider governance from the following two points: an analysis of the varieties of governance, and the question of why to focus on governance. 

Analysis and Synthesis of the Layers and Varieties of Governance 

While different forms of governance in diverse areas naturally have their own specific contexts and issues, all forms of governance are born out of the need to control a diverse group of actors’ participation, cooperation, and coordination in order to allow for the sustainable development of a society or institutions.  Related to this, ensuring conceptual consistency between types of governance at different levels of society—micro, local, national, and supranational—has become a challenge. In this research, we analyze and synthesize the governance of welfare, local governance, and markets/industry based on their specific structure and contexts.

Why Focus on Governance? 

First, what is the significance of the sudden increase in theories of governance, the so-called “governance revolution”?  Has governance itself actually changed, or is it our way of seeing the issue that has changed?  Alternatively, is the increase due to a change in how we pursue the issue and attempt to solve problems in governance?  Were previous theories of governance sufficiently aware of the meaning of focusing on the various problems?  In this research, we examine the factors which led to the recent focus on governance, as well as their validity.  Thus, this research promotes an interdisciplinary analysis and synthesis of governance, as well as an examination of the validity of focusing on governance, from legal, political, economic, and sociological perspectives.  We hope to further theorize governance, and to present a vision of governance capable of coping with modern social issues.

1) The Livelihood Security System and the Global Economic Crisis 

Looking ahead to the diverse livelihood security needs within the constraints of the aging population, natural resources, and the environment, the question of the ideal balance of cooperation and division of labor between the government and the private sector keeps coming up.  Also, what governance by various actors at the micro, local, national, and supranational levels should look like is being questioned.  On the question of welfare governance, our research compares the Japanese system with those of Germany, the US, Sweden, Korea, China, Thailand, and others.

2) Local Governance

The concept of local governance deals with the governing-governed, mandate-contract relationships between a wide variety of actors, including local governments and residents, community associations, NPOs or citizen organizations, employee organizations, welfare organizations, environmental organizations, industry, economic groups and employers’ organizations, etc.  In this project, a variety of scholars with backgrounds in fields such as politics, administration, finance, history, and thought, all bring together a rich vision, and are going to address these issues based on case study findings.

3) Markets/Industry

Corporate governance is a mechanism used to discipline and supervise the mutual relationships between not just shareholders and management, but also between various other stakeholders such as directors, employees, creditors (financial institutions, etc.), and clients.  Based on this, and using basic contract theory as our analytical tool, we offer a theoretical and empirical analysis of the experience of Japan.

After clarifying the impact of the shift from prewar traditional corporate governance (which assumed a fluid labor market and stock market) to what became known as “Japanese style corporate governance” in the postwar period (emphasizing employee benefits), and then the ramifications on corporate governance of the more institutional changes in the financial and labor markets of the 1990s and later, in this research we want to try a comparative institutional analysis to reveal the relationships between exogenous factors of the market environment etc., and the most efficient forms of corporate governance.  Specifically, our particular focus will be on international comparisons, historical analyses, and interaction between corporate governance and labor organizations.