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The chapter explores both the role of international organizations in promoting equity market finance and the circumstances of the international market for equities, which make a local market necessary. It pays particular attention to the role of the International Finance Corporation (a part of the World Bank Group) in fostering convergence in the market for transnational equities. This market is really only available to large, multinational firms and sophisticated institutional investors. Hence, national or local markets become necessary for the creation of certain securities, particularly those associated with privatization programs.

This chapter explores the building stage of the relationships among Congress, the IMF, and the World Bank, along with their domestic constituencies in American politics. The exogenous change that facilitated this process was the gradual resumption of international lending after World War II when Citibank and Chase Manhattan extended their branch banking operations overseas. As the work programs of the IMF and World Bank evolved, they reached out to the corporate community and Wall Street, initially to enable securities legislation permitting the World Bank to raise capital domestically. The chapter argues that internationalists, together with banks and large corporations, forged a powerful bloc of support by promoting the Bretton Woods institutions as a rival development strategy to the communist one during the Cold War. The bloc subsequently assisted in passing legislation creating two new agencies under the umbrella of the World Bank Group, the International Development Association and the International Finance Corporation. An important mechanism of congressional advocacy in these years was the insertion of provisions in legislation creating them that influenced their early functioning.

This chapter analyses the environmental performance standards utilized by international financial institutions working with the private sector, with a view to suggest further means to strengthen their application and integration in contractual loan agreements. In addition, the role of international financial institutions' complaints mechanisms is also considered as avenue for victims of corporate environmental damage. Once again, the specific case of the International Finance Corporation is analysed in detail to formulate recommendations that may be of interest for other international financial institutions.

This chapter offers an assessment of the international environmental standards utilized by international financial institutions to review private companies' projects eligibility for funding and to set conditions in loan agreements. It further explores the extent to which these standards are based on international environmental law, and the extent to which they are expected to be taken into account directly by private companies. The chapter focuses in particular on the most recent environmental Performance Standards launched in early 2006 by the International Finance Corporation (IFC), which clearly defined the standards for the environmentally acceptable conduct of private companies in accordance with specific international environmental treaties and initiatives.

The formal institutions and structures of Japan's budgetary system are complex; the processes of making budgets through them labyrinthine and opaque. The proliferation of the number and different types of budgets and accounts is partly an historical legacy of the creation of the modern state after the Meiji Restoration, when many of them were established, and used explicitly as instruments of national economic development. There are two main central government budgets: the General Account Budget and the so-called second budget, the Fiscal Investment and Loan Programme. Both budgets are revised in-year, and revisions are incorporated in one or more Supplementary Budgets. There are, besides, the budgets of public banks and finance corporations, compiled under the sole or shared supervisory jurisdiction of the Ministry of Finance, and those of other public corporations and special companies, supervised by various Spending Ministries and Agencies. Finally, there are thirty-eight Special Accounts, established by law to manage the revenues and expenditures of specific government activities or special projects.

Japan's Fiscal Investment Loan Programme (FILP), also known as the second budget, was a policy-based public finance system through which traditionally the national government transmitted the accumulated savings of small investors to dedicated governmental and quasi-governmental organizations for investment in projects and programmes designed to achieve prescribed national economic and social (and party political) objectives. Since its inception in 1953, FILP has been characterized, first, by the unique source of its funds, and the control of their allocation by the Ministry of Finance for the development of economic, industrial, and social infrastructure; second, by the methods of financing capital projects and programmes through investments, loans, and the underwriting of bonds issued by a number of eligible national, regional, and local organizations; and, third, by the provision of loans and subsidies to some Special Accounts, and the General Account Budget itself.

The Ministry of Finance reacted to the emergence of the fiscal crisis in 1975 by prescribing three related policy aims: to devise and implement a strategy to change the structure of Japan's tax system so as to provide a more stable and productive source of revenue; to constrain the growth of public spending; and to reduce and, if possible, eliminate the fiscal deficit, and with it the rising costs of government debt. Over the following twenty-five years, those aims were translated into specific short and medium-term policy objectives, refined and adjusted contingently to accord with conjunctural changes in the economy and the polity. This chapter explains the origins and evolution of those objectives, and describes the formulation of policies, and the process of ‘policy succession’, to achieve them. The fiscal reconstruction of 1976–87, fiscal consolidation of 1987–91, fiscal reform in 1996–98, and fiscal explosion in 1998–2000 are discussed.

In Japan, the general context of budget-making, up to the Cabinet's approval of the Ministry of Finance's draft budgets for both the General Account Budget and the Fiscal Investment Loan Programme in December, was shaped by a combination of short-term and medium-term political and economic factors. The medium-term context was set by the five-year National Economic Plan and the Medium Term Fiscal Projection. Revised and rolled forward each year, the latter provided stylized projections of aggregate expenditures and revenues for the upcoming fiscal year and three years ahead, based mainly on the (equally stylized) economic growth assumptions in the National Economic Plan. The shorter-term macroeconomic context was provided mainly by the annual estimates of GDP (and other key economic variables), and the consequential projections of revenue and borrowing.

In Japan, the processes of budget-making were divided temporally by the submission of the formal budget requests by the Spending Ministries and Agencies on 31 August. Prior to that, the Ministry of Finance had to decide, and Cabinet approve: first, the upper limit on the size of the overall General Account Budget, and the amount and type of government borrowing to finance capital investment programmes, and to cover any deficit on current expenditure; second, the budget guidelines to be used in the preparation of budget requests; and, third, within those guidelines, the upper limit or ceiling for the budget of each ministry and agency. The budget processes of the Fiscal Investment Loan Programme proceeded in parallel and interacted with those of the General Account Budget at several important stages. This chapter examines Japan's budget strategy and guidelines as well as ministerial budget ceilings and the influence of the Liberal Democratic Party in budget-making.

In Japan, ministries and agencies submitted budget requests for shares of the General Account Budget to the Ministry of Finance (MOF) on 31 August each year. Their processes of internal compilation were concerned with two main issues: the budget limit or ceiling agreed informally with the Budget Bureau prior to submission, and, within that ceiling, the allocation of shares to each bureau, and to the programmes, projects, and items of spending of their policy divisions. Those issues were articulated through four linked and overlapping processes: first, the evolution, preparation, discussion, and negotiation of budget proposals within and between the policy divisions of each bureau; second, the examination of those proposals by the ministry's Budget and Accounts Division, and its negotiations with divisions and bureaux; third, and concurrently, the ministry's Budget and Accounts Division's informal negotiations with the MOF's Budget Bureau of that probable budget ceiling (that is, its putative share of the total of the planned General Account Budget); and, finally, the preparation and legitimation of formal budget requests.

After Cabinet approved the budget strategy, and ministries and agencies were informed of their ceilings in June or July, the initiative within the Budget Bureau passed to the budget examiners and deputy budget examiners. The broad aim was to deliver by December a draft Ministry of Finance budget within the budget ceiling, and consistent with the guidelines approved by Cabinet for the different categories of expenditure. There were four main stages of compilation following the formal submission of budget requests at the end of August: the hearings, examination, negotiations, and ‘revival negotiations’.

This chapter examines the rules-of-the-game that governed the Japanese Ministry of Finance's (MOF) relationships with the Spending Ministries and Agencies, and what norms of behaviour guided Budget Bureau officials in their interactions with opposite numbers. First, there were the general bureaucratic norms or universal principles that guided bureaucratic conduct, embedded historically in the institution of bureaucracy. Second, within the general contours described by such norms were those that distinguished the behaviour of MOF officials from those in other ministries and agencies, the distinctive habits and customs of work, and standard operating procedures. Third, within the contours of those ministry norms, and the more universal bureaucratic ones, were the specific norms of behaviour, which guided and regulated the conduct of officials in the Budget Bureau compared with their colleagues in, say, the Tax Bureau or (until 1998) the Banking Bureau and Securities Bureau.