2023 Volume 58 Issue 4 Pages 3-28
This article examines the developmental process of the Japanese petrochemical industry during the high-growth era, 1955-73, focusing on institutional changes in public–private relationships. Previous studies have primarily emphasized the investment regulation process for industrial development and evaluated the role of the government as being positive or negative. However, the actual dynamics of public–private relationships within the industrial policy remained unclear. The institutional background of such relationships and changes therein were little evaluated despite the interrelation being considered as “public–private cooperation” being used to describe this interrelation. Notable changes during this period included those in government objectives, influential firms, investment guidelines, the degree of liberalization, and the Naphtha problem. This article aims to identify the beliefs held by the government and private sector while highlighting their strategic relationship concerning capital liberalization and the Naphtha problem, which were significant external environmental changes during this period. The study utilizes the theoretical framework of comparative institutional analysis to show the strategic relationship between the government and private sector, considering that multiple interrelations could be inferred depending on their beliefs. A public–private cooperation was established in this period based on their shared interest in addressing the threat of capital liberalization. As part of this cooperation, the petrochemical roundtable conference was conducted on investment regulations for the industry to acquire international competitiveness. Additionally, beliefs regarding the Naphtha problem differed between petroleum-related and chemicalrelated firms, which influenced the sector’s bargaining power against the government. Petroleum-related firms had advantages in implementing investments compared to what chemical-related firms did and such diverse strategic relationships between the government and private sector are likely to have led to the differences in firm performances. Institutional changes during the period had significant influences in the context of public–private cooperation and industrial development considerations.
