Abstract
The conventional view in the field of international political economy – that greater economic interdependence creates an incentive for active foreign policy engagement – is hard to reconcile with Japan’s foreign economic policy. To explain this counterintuitive outcome, we develop a new model of domestic demand for policy activism that integrates strands of prospect theory, collective action, and interest aggregation. We argue that both the rationale for mobilization and lobbying capacity are essential elements in understanding the domestic demand for significant foreign policy departures. We apply this conceptual framework to Japanese foreign economic policy in two issue areas: finance (Japan’s response to the 1980s Latin American debt crisis and the late 1990s Asian Financial Crisis), and trade (Japan’s Free Trade Agreement negotiations with Mexico and South Korea).
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