MITI and the Japanese miracle
Page 13
85
Thus one reason for the private sector's participation in amakudari is the extensive licensing and approval authority (kyoninkaken) of the government. Companies believe that having former bureaucrats among their executives can facilitate obtaining licenses from the ministries. The Ministry of Construction exercises licensing authority over the building industry, the Ministry of Transportation over rail and air transport and the bus and taxi business, the Ministry of Finance over the banks, and MITI over the key industriessteel, electric power, and chemicals in the 1950's, automobiles and appliances in the 1960's, advanced electronics in the 1970's, computers, robots, and new sources of energy in the 1980's. With this in mind it becomes understandable that whereas during the 1950's and 1960's very few ex-MITI officials joined foreign-affiliated firms, during the 1970's, with MITI's new commitment to the "internationalization" of the Japanese economy, ex-MITI officials began to appear in Matsushita-America, IBM Japan, and Japan Texas Instruments.
86
It is misleading to consider this type of government-business relationship a form of "corruption"; it is, rather, an adaptation by private business to a particular governmental environment. The same adaptation occurs in other countries, although in the United States the preferred insiders are ex-congressmen rather than ex-bureaucrats (except in the defense industries). Thus, during the 1970's Albert Gore, Sr., a former senator, became a lawyer for Occidental Petroleum; Paul Rodgers, former chairman of a House public health subcommittee, became a member of the board of Merck and Company; and Brock Adams, former congressman and secretary of transportation, became a lawyer for Trans World Airlines.
87
This preference for congressmen rather than bureaucrats in the United States merely reflects the market rationality of the American system as contrasted with Japan's plan rationality.
Preferential access to the government for the strategic industries in Japan is not an unintended consequence of the developmental state; it is in fact an objective of the developmental state. This is the true significance of amakudari. A cost of the system is occasional misuse of access to gain some private advantage. Nonetheless, from the Japanese point of view, the advantages of amakudari for smooth policy formulation and execution outweigh this cost. The Japanese refer to consultations between ex-bureaucrat seniors and their incumbent
Page 71
juniors as "digging around the roots" (
nemawashi
), that is, preparing the groundwork for a government-business decision. To outsiders it often looks like "consensus."
The most senior amakudari positionsfor example, the postretirement landing spots of MITI's vice-ministers (see Table 6)are bases from which to coordinate the strategic sectors. At this level the Western distinction between public and private loses its meaning. As Eleanor Hadley remarks about the prewar zaibatsu, "The combines' strength was regarded as national strength but their profits were seen as private property."
88
In the postwar world this relationship persists, except that the weight of the government is much stronger. Sato* Kiichiro*, former president of the Mitsui Bank, observes that "during and after the war, . . . Japan's economy was controlled until it has become second nature with us to uphold a planned, controlled economy."
89
At the level of the supreme leadership of the business community, the primary concern is that the relationship between government and business be managed effectively for the good of all. Amakudari is significant here only in that it contributes to a common orientationas does education at Todai*, golf club memberships (MITI's Amaya acknowledges that "they do other things than play golf at golf courses"), and the common experience of the war and its aftermath.
90
Of the five postwar presidents of Keidanren (the Federation of Economic Organizations)Ishikawa Ichiro* (18851970), Ishizaka Taizo* (18861975), Uemura Kogoro* (18941978), Doko* Toshio (b. 1896), and Inayama Yoshihiro (b. 1904)three are former bureaucrats (one at Communications, two at Commerce and Industry) and four are graduates of Todai (one in engineering, one in economics, and two in law). It would be difficult, however, to correlate their backgrounds with their policies, except to say that all five worked closely with the government. Ishikawa (a nonbureaucrat engineer), Uemura (an exbureaucrat), and Inayama (an ex-bureaucrat) were most cooperative; Doko (a nonTodai engineer) was less so; and Ishizaka (a Todai law exbureaucrat), perhaps surprisingly, was the least cooperative.
Amakudari provides one more channel of communication for the government, the business community, and the political world. Nakamura Takafusa believes it is the main channel of liaison between the business world and the bureaucratic world.
91
Nonetheless, its influence is tempered by the similar but also cross-cutting influences of school ties, marital alliances, clan networks, deliberation councils, senior-junior relations, and the ministerial clubs of all retired bureaucrats (for example, MITI's Kayo-kai*, or Tuesday Club, had some 588 members in 1963).
92
The human element also enters. Some bureau-
Page 72
TABLE
6
MITI Vice-Ministers and Their Amakudari Positions (as of 1978)
(Parentheses under names indicate years of active service in MITI)
Name
Vice-minister dates
Amakudari position(s)
1. Yamamoto Takayuki (19291952)
5/493/52
Vice-president, Fuji Iron and Steel; died May 17, 1961.
2. Tamaki Keizo * (19301953)
3/5211/53
President, then chairman, Toshiba* Electric Co.
3. Hirai Tomisaburo* (19311955)
11/5311/55
President, then adviser, New Japan Steel Corp.
4. Ishihara Takeo (19321957)
11/556/57
Vice-president, then auditor, Tokyo Electric Power Co.
5. Ueno Koshichi* (19321960)
6/575/60
Vice-president, then adviser, Kansai Electric Power Co.; president, Kansai Oil Co.
6. Tokunaga Hisatsugu (19331961)
5/607/61
Vice-president, New Japan Steel Corp.; then president, Japan Petroleum Development Corp.
7. Matsuo Kinzo* (19341963)
7/617/63
Chairman, Nippon Kokan* Steel Co.
8. Imai Zen'ei (19371964)
7/6310/64
President, Japan Petrochemical Corp.
9. Sahashi Shigeru (19371966)
10/644/66
Sahashi Economic Research Institute; chairman, Japan Leisure Development Center.
10. Yamamoto Shigenobu (19391968)
4/665/68
Executive director, Toyota Motor Co.
11. Kumagai Yoshifumi (19401969)
5/6811/69
President, Sumitomo Metals Corp.
12. Ojimi* Yoshihisa (Spring 19411971)
11/696/71
President, Arabian Oil Co.
13. Morozumi Yoshihiko (Autumn 19411973)
6/717/73
President, Electric Power Development Company.
14. Yamashita Eimei (19431974)
7/7311/74
Managing director, Mitsui Trading Co.; president, Iran Chemical Development Co.
15. Komatsu Yugoro* (19441976)
11/747/76
Director, Kobe Steel Corp.
Page 73
crats simply do not like amakudari because they feel that it is beneath them as officials to become involved in business for profit or because they do not want to come back to their old ministry to lobby their younger colleagues. Iwatake Teruhiko, for example, joined Kobe Steel after retirement from MITI, but he did not approve of amakudari. When a Ministry of Finance official, Inoue Yoshimi, beat him out as president of Kobe Steel, he was offered the presidency of a satellite company, but he resigned instead and became a lecturer in literature at Todai *, something he had wanted to do for many years.
The Japanese government-business relationship does not always work as smoothly as it appears to on the surface. A major check to its effectiveness, one that often alters the various relationships within the establishment in unforeseen ways, is competition among ministrieswhat the Japanese call "sectionalism." Some observers believe that it is the most important characteristic of the Japanese government, either limiting its potential effectiveness or mitigating its enormous powers.
94
To judge by the Japanese term commonly used to describe it
gun'yu
*
kakkyo
(the rivalry of local barons)one would think that the Japanese believe sectionalism is an inheritance from the samurai era. Certainly one demonstrable cause of sectionalism was the Meiji Constitution of 1889, with its provisions for "independent responsibility to the throne," meaning that ministers and their ministries were not accountable to the prime minister, the cabinet, or the Diet, but only to the Emperorand hence to no one but themselves. The drafters' intent was to prevent rivals to the oligarchs from coming to power and using the government against them, but the actual result was numerous instances in which the military ministries used their radical independence to defy all authority. And many scholars believe that the lack of coordination between the army, the navy, and the rest of the government during the Pacific War was a major cause of Japan's overwhelming defeat.
95
The Constitution of 1947 states that "executive power shall be vested in the Cabinet" (art. 65), and that "the Cabinet, in the exercise of executive power, shall be collectively responsible to the Diet" (art. 66). Nonetheless, the cabinet has no coordinating organs, and executive power has remained, as it was before the war, in the ministries. (Neither the Board of Audit nor the Cabinet Legislation Bureau, the two main staff organs attached to the cabinet, has supervisory or coordinating powers over the ministries.) A minister can no longer bring down a government simply by resigning, but the old traditions of intense independence and of rivalry persist. Sahashi Shigeru, a former MITI vice-minister, contends that on this score the cabinet sys-
Page 74
tem of 1885 continues unchanged in its essentials to the present. He concludes, "Bureaucrats are officials of the various ministries first and only second are they servants of the nation."
96
The postwar expansion of the bureaucracy followed by efforts to reduce its size reinforced this tradition. A bureaucrat's security and livelihood became dependent on maintaining or expanding his ministry's jurisdiction. Shrinking jurisdictions threaten not only the bureaucrats' active-duty positions but also their amakudari prospects, since a ministry needs clients and captive organizations to hire those of its retired members who do not have readily marketable skills. Tradition and circumstances thus produce an intense "territorial consciousness" (
nawabari ishiki
), punctuatedin Sakakibara's wordsby "gangster-like struggles over jurisdiction" (
yakuza no nawabari arasoi
) throughout the state bureaucracy.
97
Whatever the issue, bureaucrats' willingness to fight to defend the interests of their service has a marked delaying and distorting effect on Japanese governmental policy. Many decisions of the Japanese government are incomprehensible to the outside observer unless he or she understands the bureaucratic interests at stake and the compromises that these interests necessitate. In 1974, for example, when Prime Minister Tanaka proposed the creation of an overseas economic cooperation ministry, warfare among the existing ministries burst into the open. MITI had already tried to get written into the 1974 budget a proposal for a "mining and manufacturing overseas trade development corporation," and Agriculture wanted an "overseas agriculture and forestry development corporation." They were actively competing with each other for a share of what looked like an expansion of Japan's economic aid activities. Foreign Affairs promptly objected that it already had two agencies under its jurisdiction that had purposes similar to the proposed ministry. Prime Minister Tanaka ultimately decided on a ministry that would incorporate the two Foreign Affairs agencies but include MITI and Agriculture in their management. Foreign Affairs fought on and finally accepted the new International Cooperation Agency of August 1974 only when it was agreed that it would
not
be a ministry and that a foreign office official would head it.
98
When Tanaka was prime minister he also promised in his reelection campaign to create a Medium and Smaller Enterprises Ministry, just as a few years later Prime Minister Fukuda promised to create an Energy Ministry and a Housing Ministry. Regardless of whether this proliferation of ministries would have been a good idea, the reason that none of them ever saw the light of day was not substantive objections but ministerial resistance. MITI mobilized the Agriculture and
Page 75
Welfare ministries to stop the medium and smaller enterprises proposal by arguing that they, too, would lose some jurisdiction, to say nothing of MITI itself. MITI and the Ministry of Construction stopped the energy and housing ideas by utilizing their old boy networks, since neither ministry wanted to lose the petroleum and housing businesses as places for their officials to retire.
The longest continuing struggle in the Japanese government, dating from well before the war, has been over the attempt to take control of the budget away from the Ministry of Finance in order to lodge it in the cabinet or some supraministerial coordinating agency. In 1955 Kono * Ichiro* conceived of an independent budget bureau; in 1963 the Temporary Administrative Investigation Council recommended creation of a system of cabinet assistants to oversee the budget; and in 1970 Kawashima Shojiro* called for the establishment of an Overall Planning Agency (Sogo* Kikaku-cho*). The Ministry of Finance successfully beat back all these proposals. Regardless of what the constitution says, the coordinating power of the Japanese executive branch is exercised through the three annual budgets (general account, special accounts, and government investment), and control over them is in the hands of the Budget Bureau and the Financial Bureau of the Ministry of Finance.
The
Asahi
argues that, because of ministerial rivalry, in foreign affairs Japan can never create a monolithic negotiating positionwhich is not necessarily a bad thing. Contention often develops among Foreign Affairs, Finance, and MITI during any major international negotiations. Each of them maintains its own overseas communications networkForeign Affairs through the regular foreign office cable system, Finance through the telex system of the Bank of Tokyo, and MITI through the telex system of JETRO. According to the
Asahi
, Japan actually has three foreign services, each of them with different policies and each represented overseas. The Ministry of Foreign Affairs is the most internationalist, MITI has historically been protectionist, and the Finance Ministry is fairly internationalist but stingy about spending money for defense or foreign aid. Policy is a result of compromises among these positions, and the compromises change as the power positions of the three ministries shift with political developments.
99
The headquarters of a ministry engaged in interministerial struggles is, of course, its home office in the Kasumigaseki district of Tokyo. But in addition to its home office staff and its various old boy networks, client organizations, deliberation councils, and public corporations, each ministry has "assets" (
kabu
) spread throughout the government in the form of transferees, or what the French call
dé
-
Page 76
tachés
. The old-line ministries engage in a relentless contest to capture and control the more vulnerable agencies of the government through the sending of
détachés
. Their primary targets are the independent agencies attached to the prime minister's office, each of which is headed by an appointed minister of state (
kokumu
daijin
): The Defense Agency, the Economic Planning Agency, the Science and Technology Agency, the Environment Agency, the National Land Agency, and a few others. The transferees who staff these agencies make up what the press calls expeditionary armies, which are quite regularly committed by their ministries to the "battles for the outposts" that are a serious part of the Japanese policy-making process.
The case of the Economic Planning Agency (EPA) has been the most widely studied and reported.
100
Suffice it to say that MITI and the Ministry of Finance both hold strong positions at the EPAMITI controls its vice-ministership (since the 1960's a prestigious terminal appointment within the MITI personnel hierarchy) and the head of its Coordination Bureau, together with several section chief positions; Finance names its chief secretary and some important section chiefs. The positions MITI controls are valuable to it because through them it is able to place its own representatives on the Bank of Japan's Policy Board and on the deliberation council that supervises the Ministry of Finance's trust fund accounts, which are used to fund the investment budget.