USC Professor Awarded NEH Fellowship
Saori Katada of international relations will research Japan’s efforts to reorient its economic policies along regional lines.
Katada’s Advanced Social Science Research on Japan Fellowship will help her to complete her book, Fragmented Regionalism, the first in-depth study of Japan’s emerging economic strategy to rely less on the U.S. dollar and more on regional partnerships in East Asia.
“The U.S. can no longer take East Asia for granted,” Katada said. “In order for China, Japan and Korea to have bargaining leverage with the United States, they must have something to fall back on.
“So if the U.S. does something East Asia doesn’t feel comfortable with, like the U.S. anti-dumping suit against the Japanese, East Asia is now developing a way in which they can say ‘we have our own arrangement.’ Maybe not now but in the near future – five or 10 years – they can rely less on the U.S. dollar and the International Monetary Fund.”
After World War II, Japan reached out globally, particularly to the United States, which became its most important economic partner, Katada said.
The economic prosperity of the 1980s suggested this strategy worked. But after the 1997 Asian financial crisis, the Japanese government and its business community departed from their foreign economic strategies and began developing regional systems – essentially, a new commercial architecture in the region.
Now the Japanese government is trying to set standards for regional rules and institutions, fostering East Asian regional networks. In this new strategy, Japan is forging closer ties with its neighbors rather than its previous isolation and role as a U.S.-appendage in the region.
The regional architectures include free trade agreements under which governments commit to lowering barriers against trade with particular partners. It also includes regional funding and currency cooperation, which enables governments to protect the regional economy and avoid financial crises.
“Japan is neglected these days, and while it is true that the country is mired by many domestic problems, one should not forget that it is still the second-largest economy in the world and one of the largest creditors,” Katada said. “It’s quite apparent now that the Japanese government is serious about establishing regional institutions to help stabilize the regional economy and foster regional identity.”
In the spring, she will conduct research in Japan and in the fall, her research will take her to China and Korea. Her native language is Japanese and she also speaks Spanish, some German and reads Chinese. The National Endowment for the Humanities fellowship will assist her in writing the book, which she expects to complete next year.
Some of Katada’s research will involve interviewing government officials from the Bank of Japan and the Ministry of Finance Japan, as well as private bankers and business people from large industries involved in policy initiatives. Her previous work at the World Bank headquarters in Washington, D.C., and for the United Nations Development Programme in Mexico City gave her firsthand experience in economic policies.
Her first book, the award-winning Banking on Stability: Japan and the Cross-Pacific Dynamics of International Financial Crisis Management (University of Michigan, 2001), focused on Japan’s involvement in three major financial crises in recent decades throughout the world. Research for her first book triggered her interest in East Asian regionalism.
The current financial meltdown in the U.S. underscores the importance of Japan’s new economic strategy.
“Observing what’s going on now in East Asia and changes as a result of the U.S. economic crisis will likely be the last chapter of the book,” she said.