A large literature in political economy argues that governments in the advanced industrialized states retrenched from the application of industrial policy while resisting pressure to reform in a limited number of sectors. In this article, I argue that retrenchment and resistance do not fully describe the range of choices made by governments. Through an analysis of investment in energy policy in Japan, I show that in addition to retrenching from industrial policies and resisting pressure to

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... e industrial targeting, domestic actors have retained and redeployed state functions in public policy areas unaffected by the causes of liberalization.