Philip G. Cerny
The post-war Japanese model was predicated on the ability of Japan to resist the kind of globalizing, marketizing laissez faire represented by Thatcherism and Reaganism and the ability of Japanese firms, backed up by the state, to exploit that very globalization and marketization to expand their world market shares. At the core of the model was the financial system. John Zysman (1983) has argued that the financial system has constituted the core of each of the dominant national models of political economy in advanced industrial countries. Finance plays this role for several reasons (Cerny 1993, 1994, 2000b, 2000c).
Governments, too, play a crucial role by providing a currency system and a set of national financial institutions (central banks, etc.), by regulating financial institutions and markets to prevent system failure and manage crises, and by manipulating fiscal and monetary policy in order to promote economic development and growth. This central role not only gives state actors paramount roles in determining the framework, operation and performance of particular national economic systems, but also gives states as institutional structures key trump cards in filtering and shaping the impact of international economic changes, i.e. of globalization.
Some national economic systems are a priori more open and vulnerable to the 'imperatives' of financial globalization than others. Thus for 'arm's-length' financial systems (Zysman 1983) or 'financial market economies' (Coudrat 1986) found in the US and the UK, globalization is in large measure an extension of national practices on to a wider playing field, leading to the Anglo-Americanization of international finance and to greater convergence of national and 'global' market practices. Many late nineteenth- and twentieth-century national financial systems such as that of Japan, however, were based on very different structures and practices. 'Late industrializers' wished not so much to see capital flowing freely across borders as to keep it at home. While protecting infant domestic industries from destructive foreign competition, such countries in