Abe's Reform Drive a Battle with Deeply Rooted Bureaucracy
Stamping out common practice of assigning lucrative private-sector
jobs to retiring government officials a key step toward truly free,
Masahiko ISHIZUKA (Councilor for the Foreign Press Center Japan and also teaches at Waseda University)
The term amakudari, which translates as "descent from
heaven," says it all. In this time-honored, routine practice,
prematurely retiring bureaucrats land handsomely compensated posts
as private firms or organizations, though some are
semi-governmental. Although their time in government - "heaven" -
has come to an end, they are able to land gracefully thanks to the
practice. In most cases, enterprises are effectively forced to
accept those descending from a government agency because they
themselves are under the agency's jurisdiction. Above all, this
illustrates the hierarchical relationship that exists between the
government and industry, one in which bureaucratic authorities
exercise such complete control over the private sector that they
even dictate extraordinarily small matters.
One example is how the Ministry of Health, Labor and Welfare sets
detailed guidelines that hospitals must follow in advertising
themselves. The meticulous regulations bureaucrats enforce on
businesses and individuals are often astonishing.
The problem is more than a simple matter of control. Under the
amakudari system, bureaucrats land cushy jobs, or at least are
assured job security. In return, they provide influence with their
former ministry colleagues so their new employers can navigate the
The practice was once tolerated and in some cases welcomed by
industry and the public, but that is no longer the case. Amakudari
and the problems it causes have blown into a major political issue.
One of the main problems is widespread bid-rigging on public
projects. It is so common that some business leaders are call it a
die-hard culture, and it has recently given birth to some major
scandals. Amakudari is blamed for this corrupt practice because it
creates murky ties between bureaucracy and industy.
It has reached the point where Prime Minister Shinzo Abe has made
amakudari into a reform issue he can wield to score political
points. Under a pending bill, government ministries would be
prohibited from placing early retiring bureaucrats at private
companies under their jurisdiction. A unified job-placement agency
would be created to help bureaucrats being pushed out the door land
new jobs, but at the same time it would shield the process from the
influence of individual ministries.
Bureaucrats' careers are shaped by a series of promotions. But once
they reach a certain level, there are fewer positions into which
they can rise. Those that miss the cut are theoretically expected to
retire, but in reality, they move into the private sector and join
companies they once regulated.
Skeptics question whether the proposed system will bring about real
change, pointing out that bureaucrats are very good at devising ways
around laws they do not want to follow. Any solution to the problem
will have to either curtail bureaucratic power or reform the
personnel system so bureaucrats can keep their jobs until they reach
true retirement age.
The bureaucracy has been credited with designing and fueling Japan's
modernization and economic development over the past century,
especially during postwar decades and in conjunction with industrial
leaders. That Abe has now made the abolition of amakudari into a
political goal is symbolically significant: What was once an asset
is now a liability.
When former U.S. President Ronald Regan famously said the government
was not a solution but a problem itself, Japanese probably failed to
grasp his meaning. For all the defects in Japan's bureaucracy and
the burdens it placed on society, the people believed in it and
relied on its work.
At the crest of the country's economic success in the late 1980s,
Americans perceived a threat coming from Japan. Suddenly, a strong
bureaucratic system appeared to be trumping small government,
free-market economics. And the perceived threat was coming just as
communism was being defeated in Eastern Europe.
Perceptions and realities drastically changed in the 1990s, but
Japan's bureaucracy nevertheless has survived intact. Perhaps now
many Japanese can more fully understand what Regan was talking about
two decades ago.
Privatization and deregulation have been much talked about in recent
years, with former Prime Minister Junichiro Koizumi's targeting of
the postal services for privatization intended to be a symbolic
Despite that, the bureaucracy has seemingly remained a steadfast
monster - if no longer a juggernaut - resisting calls to give up
control over every nook and cranny of the nation's life and
business. That said, businesses, and perhaps consumers as well, are
not entirely free of blame.
In the past several months, Japan has been plagued by a string of
high-profile corporate scandals. The long list includes a leading
brokerage doctoring its books, major insurance companies sabotaging
policy payouts, a well-known confectionary maker breaching hygienic
regulations for years, and major construction companies engaged in
Scenes of company executives bowing to television cameras in apology
are commonplace these days. Their scandals have prompted many to
ponder whether the private sector might inherently be crooked and go
away unless checked and policed by a governmental watchdog.
Meanwhile, they have also given bureaucrats a perfect excuse to
tighten regulations or interfere in private business - even the
Consumers also encourage the bureaucracy to clench its grip as more
often than not they hold the government responsible for letting
these wrongdoings occur.
The government-initiated debates on education reform offer another
prime example. An alarming development at the advisory council,
where the debates are taking place, is the Education, Culture,
Sports, Science and Technology Ministry's unabashed attempt to
strengthen the state's control over education.
For Japan to achieve a truly free, efficient and independent-minded
society, it is crucial to abolish the self-righteous bureaucracy.
Stuck to the myth of its own infallibility, it is condescending
toward the private sector and citizens, possesses an insatiable
desire for control and regulation based on bureaucrats' own
selfishness and greed.
(Originally appeared in the April 23, 2007 issue of The Nikkei Weekly, reproduced here with permission.)