Crime and Punishment: Regulation in Japan
January 19, 2008, The Economist

The Economist recently discussed the differences between the penalties imposed on corporations by Western and Japanese regulatory agencies.  In the West, financial penalties are more common, while in Japan, businesses are frequently forced to stop some part of their operations.

This accepted practice, which may seem odd to Westerners, may have a cultural explanation.  "Under the Confucian tradition government has an absolute right to regulate all aspects of social and business relations for the common good," says Christopher Wells, a partner in White & Case's Tokyo office.  As explained in the article, in the Confucian tradition, the right to act freely is a "grant of a benefit from the state.”

"A business suspension simply withdraws this grant from the beneficiary," says Wells.