Bank of Japan, Osaka © Wikimedia Commons

CEAFJP WORKSHOP

Junior Scholar Workshop

Fresh Topics in Comparative Political Economy:
Japan and Europe
November 28th 2018
9:00 - 16:30
EHESS, Room A7_37
54 Boulevard Raspail, 75006 Paris
The year 2018 marks the ten-year anniversary of the global financial crisis. While a large literature incomparative political economy has examined causal factors behind the crisis, newer scholarship has moved
to studying the crisis’s aftermath and other more recent phenomena, including the status of the post-crisis
finance sector, the reemergence of monopolies in national markets, states’ adjustment to demographic
change, the role of legal actors in stopping predatory lending, and the problem of unprofitable “zombie” firms
which defy creative destruction. This workshop convenes junior scholars in comparative political economy
to present and discuss research on these and other fresh topics as they pertain to Japan and Europe. The
workshop features a keynote presentation by Dr. Eric Monnet (Banque de France) on the political economyof French banks in historical perspective.

Program
9:00 - Welcome Remarks
Sebastien Lechevalier (EHESS-FFJ)

9:15 - Political Economy of French Banks in the Interwar Period During theGreat Depression

Eric Monnet (Banque de France, Paris School of Economics, CEPR)
Moderator: Elsa Massoc

10:00 - Coffee Break
10:15 - The Political Economy of Zombie Firms
Scott Wilbur (EHESS-FFJ, CEAFJP/Banque de France Fellow)
Moderator: Gunnar Mokosch

11:00 - Banking on States: The Divergent European Trajectories of European
Finance After the Crisis
Elsa Massoc (European University Institute)
Moderator: Adrienne Sala

11:45 - Lunch Break
13:15 - Ententes and National Champions: Post-War French Competition Policyin Comparative Perspective
Erik Peinert (Brown University, Sciences Po Paris)
Moderator: Scott Wilbur

14:00 - Questioning the Lawyers’ Role in the Process of Institutional Change The Case of Over-indebtedness in Japan
Adrienne Sala (Sciences Po Lyon)
Moderator: Erik Peinert

14:45 - Coffee Break
15:00 - Adjustment to Population Ageing in Germany, Italy, and Japan
Gunnar Mokosch (Brown University, Johns Hopkins University)
Moderator: Scott Wilbur

15:20 - Industrial Demography and Economic Adjustment in Germany, Italy, andJapan
Gunnar Mokosch (Brown University, Johns Hopkins University)
Moderator: Scott Wilbur

15:45 - Conclusion

List of Communications
and Speakers
Elsa MASSOC
Elsa Massoc is a Max Weber post-doctoral Fellow at the European UniversityInstitute. She completed her PhD in Political Science at UC Berkeley in Summer
2018. Her main research interests are in Comparative Political Economy, businessand politics, inequalities and the regulation of finance. Her research has appeared in
the Review of International Political Economy, the Berkeley Journal of Public Policy
and the Socio-Economic Review. She is currently working on a book manuscript
based on her dissertation findings.

Banking on States: The Divergent European Trajectories of European FinanceAfter the Crisis
There have been different trajectories of finance across Europe since the financial crisis. I argue thatdivergent national trajectories of finance result from the differentiated influence of public authorities onbanks’ management, through the passing of diverse regulation and through the differentiated enforcementof international regulation. I have compared 12 policies and cases of regulation’s enforcement in France,
Germany and the UK since 2008. I find that everywhere, states have been pro-active in the shaping of thepost-crisis domestic financial landscapes; yet they have promoted different re-organizations of their domestic
financial industries. I explain the divergent priorities of the state towards finance by different institutionalized
modes of coordination between private and public actors in each political economy. I base my analysis ondata collected during more than 100 interviews with prominent market actors and public officials, as well asprivate and publicly available documentation.

Gunnar MOKOSCHPhD Candidate, Department of Political Science, Brown University
PhD Fellow, School of Advanced and International Studies, Bologna Campus, Johns
Hopkins University

Industrial Demography and Economic Adjustment in Germany,Italy, and Japan
What is the role of firm-size structure (“industrial demography”) in adjustment inadvanced economies? Standard approaches in Comparative Political Economy like
Varieties of Capitalism put firm-led adjustment at centre stage but pay little attention
to firm size. Yet economies differ in the average size of their firms and this affects
their ability to adjust to shifts in the international economy. I argue that industrial demography helps us
understand why three manufacturing-centric economies have seen very different economic fortunes since
the end of the Cold War: Germany, Italy, and Japan. I trace the disparity in industrial demography in thesecountries to different patterns of late industrialisation and the choices of dominant conservative catch-all
parties in the Cold-War era.

Eric MONNETMy research interests include economic history, monetary policy, financial markets,housing, and political economy of institutions. Current research projects on themacroeconomics of the Bretton Woods system and on French banking crises during
the interwar. Forthcoming book (at Cambridge University Press): Controlling Credit.
Central banking and the planned economy in postwar France (1948-1973).

Political Economy of French Banks in the Interwar Period
During the Great Depression
Despite France’s importance in the interwar world economy, the scale andconsequences of the French banking crises of 1930–1931 were never assessed
quantitatively due to lack of data in the absence of banking regulation. Using a new dataset of individual
balance sheets from more than 400 banks, we show that the crisis was more severe and occurred earlier
than previously thought, and it was very asymmetric, without affecting main commercial banks. The primarytransmission channel was a flight-to-safety of deposits from banks to savings institutions and the centralbank, leading to a major, persistent disruption in business lending. In line with the gold standard mentality,
cash deposited with savings institutions and the central bank was used to decrease marketable public debt
and increase gold reserves, rather than pursue countercyclical policies. Despite massive capital inflows,France suffered from a severe, persistent credit crunch.

Erik PEINERTErik Peinert is a fifth year PhD candidate in political science at Brown University, andfor the fall 2018, a visiting researcher at Sciences Po Centre d’études européennes.
Erik’s research interests broadly investigate the political economy of advanced
industrial states and the politics of economic policymaking, specifically in the domainof competition and market power. His dissertation seeks to understand the continual
evolution of national policy regimes in favor of competition or market power over thecourse of the 20th century, based on extensive archival field research in the UnitedStates and France. His research draws from different disciplines, such at sociology,psychology, and economics, and his broader interests broadly include business-state
relations, institutional change, antitrust, intellectual property rights, the politics of economic ideas. His work
has been published in the Review of International Political Economy. He is originally from Massachusetts in
the USA, and received his B.A. from the University of California at Berkeley.

Ententes and National Champions: Post-War French Competition Policy inComparative Perspective
A number of advanced industrial economies have consistently alternated their overall approach to policy
between enforcing price competition and defending market power over the course of the twentieth century.
France represents a particularly interesting case. Having spent the immediate post-war years trying todestroy cartels and liberalize international trade, France then turned to a market-power driven policy regimeof “national champions” in the 1960s and 1970s, before reverting again to procompetitive antitrust, merger
control, and further trade liberalization in the 1980s. This paper will argue that policy regimes in favor of pricecompetition or market power are self-undermining in the long run. However, based on preliminary originalarchival research regarding the shift away from procompetitive policies in France following World War II,I argue that it is a process of learning, contingent on the interaction between the bureaucratic setting andindividual psychological mechanisms, by which policy elites learn about the costs of existing policies.

Adrienne SALA
Adrienne Sala is lecturer at Sciences Po Lyon. She defended a PhD thesis at
EHESS in 2016, titled “The Evolution of the Consumer Credit Regulation in Japan - A
Political Economic history”. Her current research topics focus on the role of lawyers inlegislative and institutional changes in Japan. She published several articles among
which: “The Japanese Consumer Finance Market and its Institutional Changes
since the 1980s”, Japan Forum, Vol 29, 2017; “L’évolution de la réglementation ducrédit aux ménages au Japon – l’endettement comme problème public ?” Critiques
Internationales, forthcoming in January 2019.

Questioning the lawyers’ role in the process of institutional change - The caseof over-indebtedness in Japan
Since the 1950s, despite an unfriendly judiciary environment and its institutional context, several Japaneselawyers played a major role in public problems ‘ construction. With collective actions and legal mobilizations todefend the weak-interests (workers, consumers, inhabitants, victims, etc.) they obtained significant legislativechanges (e.g. Kitamura, Hirano, Noguchi, Kojima, Kakita, Kuwaki 1959; Upham 1979; Kawahito 2014). In
this presentation we analyse a specific group of lawyers’ actions involved in the Kure-sara mondai case(over-indebtedness /over-borrowing / predatory lending). This presentation is a part of our on going research
project which aim at determining under which conditions (social, economic, political and judiciary) lawyers
can represent, or not, a source of institutional and social change by comparing several cases.

Scott WILBUR
Scott Wilbur holds a Ph.D. in political science and international relations at theUniversity of Southern California. He is currently CEAFJP/Banque de France Fellow
at the Fondation France JApon de l’EHESS. In 2015-16, he was a Fulbright Graduate
Research Fellow at Waseda University. His doctoral research examines the political
economy of zombie firms among two corporate categories in Japan: listed firms
where the presence of zombie firms declined in the early 2000s; and SMEs, wherezombie firms have remained a major problem in the second half of Japan’s so-called“lost two decades.”The Political Economy of Zombie Firms
To date, little research in political science has explored reasons why policy arrangements behind so-called“zombie firms” exist. To help rectify this gap, this paper examines the political origins of zombie firms througha case study of small and medium enterprises (SME) in Japan since the country’s banking crisis in the 1990s.
Starting from quantitative data that shows a notably high zombie presence among firms in this corporate
category, the paper explores an orienting hypothesis about policies that produce moral hazard in private
financial institutions’ decisions to lend to weak firms. It then investigates and refines this hypothesis withspecific regard to conditions in Japan’s credit guarantee system for SME with information garnered fromsemi-structured interviews with government officials and finance institutions, government documents, andsecondary sources in Japanese. In general support of its hypothesis, the paper finds that drift in post-crisis
rescue policies—bolstered by lobbying from well-organized policy beneficiaries and limited public oversight—
may explain why zombie firms occur.