The dynamics of abstract and manifest institutional change: MITI and the Japanese "economic miracle" reconsidered

Abstract

Modern institutional theory specifies two different aspects of institutions. The first aspect - and by far the predominant perspective - sees institutions as recurrent patterns of behavior, values, norms and practices which guide social and political behavior. The second aspect refers to the manifest institutional systems of the state. These two sides of institutions are supposed to be mutually reinforcing. Thus, institutions are "embedded" in overarching systems of values at the same time as they "constrain" behavior. This article takes exactly the opposite approach and seeks to separate the two different meanings of institutions in order to explain changes in the effective capabilities of manifest institutions. Using the Japanese Ministry of International Trade and Industry (MITI) as an empirical case, the argument advanced in the article is that variations in the institutional leverage and capacity of MITI can to a significant extent be explained by changes in the relationship between "abstract" and "manifest" institutions, i.e. the extent to which the institutional arrangement of the state reflects predominant systems of values, norms and beliefs in society. In addition to the vast literature on institutional theory, the article draws on a series of interviews with MITI senior officials between 1988 and 1996 as well as on the literature on Japanese political economy.