The purpose of the study is to identify the similarities and differences in higher education policy formation in Japan and the UK. The study is significant insofar as it expands the existing policy analyses - such as those of Brian Salter and Ted Tapper (1994) and Maurice Kogan and Stephen Hanney (2000) in the UK context, and T. Pempel (1977) and Leonard Schoppa (1991) in the Japanese context - by introducing a comparative perspective and applying a network theory. The paper addresses two research questions:(i) What are the similarities and differences in neo-liberal policy formation in Japan and the UK?(ii) What are the causes of the similarities and differences identified in (i)? This study, taking a pluralistic position, applies network theory (David Knoke and James Kuklinski, 1991) because it allows a comprehensive understanding of policy formation by identifying the pattern of formal and informal contacts and relationships which shapes policy agendas and policymaking, as opposed to the interplay within and between the formal policymaking organisations and institutions. The study applies two methods for data collection: (1) documentation; and (2) semi-structured interviews with selected actors involved in the two higher education systems. These particular methods were chosen because they allow systematic, yet flexible, analysis and interpretation. First, policy documentation included publications released by selected stakeholders in order to scrutinise the value and stance of a particular stakeholder towards neo-liberalism, and the pattern of its involvement into higher education policymaking. Documentation and documentary analysis were, furthermore, used for coding particular concepts for analysis on data collected by semi-structured interview. The documentary analysis was useful to identify a particular actor's political stance in terms of neo-liberalism, and the historical change in actor's stance on neo-liberalism. Secondly, the study employs semi-structured, in-depth interviews with actors who were or are involved in higher education systems, and who are significant informants for past and present changes relating to neo-liberalism. The reason for the employment of semi-structured interviews was that it merits both induction and deduction from the propositions, avoiding empirical disorder and assertions derived from the pre- determination of conclusions. The total number of those interviewed was 21 [10 interviewees in Japan, and 11 interviewees in the UK]. This choice was guided by the need to establish data relating to the research questions as well as the time scope of this study.The interview was based upon a combination of open and closed questions, which allowed flexibility in my research. Questions of both types focused upon the policy determination or policy process, and the policy content associated with neo-liberalism. Closed questions were formulated to examine the logic linking the data to the propositions, attempting to answer the following questions: · Whose values predominated? · What values predominated?· When did a given set of values predominate? · How did a given set of values predominate? (Parsons, 1995: 54-57) Regarding analysis and interpretation, first, significant concepts were identified in document investigations based upon a constant comparison of the data in which categories were elicited and relationships among categories sought. Secondly, some open-coding was done once interviews were transcribed and as documents were amassed. The tentative conclusion of this study is that in Japan, the confrontation of neo-liberal and anti-neo- liberal groups and compromise between them are significant in the formulation of the government's neo- liberal policy in the sphere of higher education. In contrast, in the UK, the formation of the government's neo-liberal policy on the universities is related to conflict and compromise between government and the universities. The paper implies the pattern of the development of neo-liberal policies in the context of other European countries.