Both the economic and financial globalization and the evolution of the international system can be major drivers for domestic institutional change. In the proposed paper, I will analyzed the crisis and the reform of the Japanese model highlighting how external pressures (economic globalization and the evolving international environment) triggered a complex and multi-layered process of transition and transformation. Through the conceptual lenses of the Variety of Capitalism Approach (Hall, Soskice), I will highlight how the Japanese state reacted to the crisis of the its previous economic and political model, implementing a series of reforms that led to the creation of a institutional and political hybrid between a Liberal Market Economy and a Coordinated Market Economy. The Japanese case shows of the process of hybridization of the “institutional ecology” entails a diminished institutional coherence and affects considerably the political system. The hybridization of the CME model indeed favored the transition from a “one and a half party system” to a more competitive and substantially bipolar system.
