2020 Volume 55 Issue 2 Pages 27-50
This study examines the adoption of minimum capacity standard of 300,000-tons per year (300,000-ton standard) by the Ministry of International Trade and Industry (MITI) for ethylene plants in Japan and resulting cooperative actions by members of the petrochemical industry. In order to strengthen international competitiveness and control investment, MITI enacted a 300,000-ton minimum capacity standard for new ethylene plants in June 1967. However, in 1972, one year before the first oil crisis, there was overcapacity. Many industrial historians have studied the 300,000-ton standard as a cause of this overcapacity from a macro-perspective. However, the capacity adjustment in plant building was made through consultations between MITI and individual companies, sometimes involving the local authority. Thus, this paper examines the effects of MITI’s authorization and the prefectures’ micro adjustments with individual companies from several perspectives. My analysis reveals that MITI’s authorization criteria included not only ensuring stable supplies of raw materials, like naphtha and its derivative products, but also investment profitability, and the prevention of environmental pollution. This result implies that Japan’s industrial policy in the late high-growth era was influenced by a broad range of social and economic problems, not limited to the petrochemical industry.
