Abstract
This is a comparative study of fiscal policy under finance minister Takahashi in prewar Japan and the New Deal period in prewar United States, based on fiscal sociology approach which receives increasing attention recently. The arguments and implications are as follows; 1. Fiscal Sociology recognizes the nature of public finance as distinct from that of the market, and intends to grasp it within its interactions with society as a whole. It also focuses on policy making processes where actors with diverse interests interact, in order to find the momentum behind epochal societal changes. 2. The New Deal finance and Takahashi finance are known by the fact that they both achieved economic recovery with active spending policy. However, they differ significantly in the way relief programs were implemented, how they covered up fiscal deficits, the timeliness of policy change, and tax policy. This paper discusses these differences by clarifying institutions and related factors in both cases, such as fiscal ideas held by political leaders, the interrelationship between the central bank and finance ministry, and budgeting system. 3. Fiscal policy under the New Deal period was limited in intensifying taxation and implement ing public work programs swiftly, due to the idea of balanced budget held by Roosevelt, high autonomy in decision making by the FRB, divided policymaking power, etc. 4. Takahashi finance, in contrast, achieved drastic upturn of the economy by swiftly employing fiscal measures. The institutional settings behind it were the concentration of budgeting power to the administration (especially the ministry of finance) and weak autonomy of the central bank. However, the same institutional characteristics caused relentless increase in military spending and heavy reliance on central bank credit when some tightening in fiscal policy was called for. 5. Based upon comparative discussion above, this paper criticizes dichotomous conceptualization of "New Deal" and "Fascism", and also shows the relationship between fiscal sociology and such studies as welfare state studies, systems theory, and pluralistic theory of the state.
