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