ABSTRACT
The maintenance of a liberal trading regime imposes costs as well as accords benefits to the hegemonic leader according to the hegemonic-stability thesis. Hegemonic power is usually defined as preponderence over other members of the regime but without any clear reference to the magnitude of preponderence. The post-war liberal international economic order was based on the principles of open markets/liberal trade on the one hand and decentralized decision making on the other. Throughout the post-war period, Ministry of International Trade and Industry (MITI) economic nationalism (to some extent necessary and desirable) had been responsible for proliferation of protectionist measures that virtually barred imports of manufactured goods into the domestic market and provided safe environment within which reindustrialization of the Japanese economy could be undertaken. Chalmers Johnson suggested that liberalization came not through the MITI initiative but as a result of prior ‘realization on the part of the industry that it had to “internationalize” if it was to avoid isolation’.
