Bilateral Economic Relations in a Global Political Economy: Australia and Japan

Abstract

This paper argues that despite the internationalisation of economic activity, and a concomitant diminution of economic policy-making autonomy, national policy settings continue to display a surprising degree of divergence and remain important determinants of economic outcomes. Similarly, there are distinctively different and enduring patterns of corporate organisation across nations which confer specific competitive advantages. Important theoretical and practical questions are raised, therefore, about the potential efficacy of national economic policies and their capacity to accommodate such divergent practices. This paper examines the bilateral relationship between Australia and Japan, and assesses the effectiveness of Australia's predominantly neoliberal economic policy framework in the light of such national and organisational variation. It will be suggested that Australian policy-makers' faith in market mechanisms caused them to underestimate the significance of Japanese commercial practices and regional production strategies, rendering attempts to transform the relationship largely unsuccessful.