The dilemmas of sectoral embeddedness and the limits of Japanese business mobilisation

Recent research has provided significant insights into the impact which policy networks, or institutionalised patterns of state-society relations have on the policy process. One branch of this literature highlights how achieving a high degree of sectoral embeddedness can enhance the state's capacity to achieve industrial transformation and bolster economic competitiveness (Evans 1995, Weiss 1998). This paper builds on this research by assessing the impact of dense sectoral policy networks on the political dynamics of economy-wide, as opposed to sectoral business mobilisation. In the case of the recent politics of tax reform in Japan it would appear that concentrated sectoral policy networks may actually compromise the state's reformative capacity. The argument here is that dense industry specific policy networks exacerbate sectoral differences over tax reform and tend to create factional cleavages among state agencies and policy makers.