ORGANIZATIONAL LEARNING CAPACITY OF POLICY-MAKING SYSTEM FOR FINANCIAL SYSTEM RECOVERY: THE CASE OF SWEDEN WITH SOME SUGGESTIONS TO JAPAN

The Swedish experience of the recovery from financial system crisis with quick structural reform has often drawn attention as one of the “best practices” from policy makers in various countries. Most of the previous observations, however, merely focused on the aspect of policy measures, such as nationalization of problem banks and divestiture of “bad assets”. On the other hand, few have addressed the question why the Swedish government was able to develop such drastic and adequate measures and to apply them so quickly. Against this background, the present paper investigates the Swedish case from the viewpoint of “organizational learning capacity”. The policy-making system of the financial system recovery is regarded as a virtual organization, and the paper discusses whether this “organization ” had high capacity of organizational learning. Using the four-step process of organizational learning proposed by Dixon (1999) for the analytical framework, it is shown that the Swedish policy-making system has high learning capacity, at least in comparison with the case of Japan.