A Government Ministry:
The Case of the Ministry of International Trade and Industry

Yoshihisa Ojimi

I am pleased to have this opportunity to try to explain the functioning of the Ministry of International Trade and Industry (MITI), but I am perplexed as to where to begin because of MITI's immense size and diverse functions. Among the problems we handle are imports and exports, economic cooperation, the exchange of capital, equipment investments, factory location, and environmental problems. We cover businesses from the largest down to the small- and medium-size enterprises. We cover industries from manufacturing to distribution, including the machinery industry, chemical industry, heavy industry, and textiles. Recently leisure industries, even golf, have been included. The advertising and newspaper industries are also included but, of course, because newspapers are rather frightening, little is done about them. We also deal with consumer complaints and problems concerning energy and power resources. We have sixteen laboratories working on manufacturing technology, and patents are also a big field for us.

As can be seen from this brief sketch, we cover a wide range of activities, several in cooperation with other ministries. Apart from relations with other ministries, there are also frequent problems involving the relationships between MITI and such other institutions as the Diet, the political parties, zaikai (financial circles), the shingikai (advisory commissions), and the iinkai (council).

I will direct my remarks on the question of decision-making in MITI toward the general mood, the basic approach, and common patterns within the ministry. I always have trouble when people inquire about these questions concerning MITI. To many outsiders MITI appears obstinate, tough, and difficult to deal with. Yet, there are always a number of persons who are surprised to find MITI kinder, more understanding, and more dependable than they had expected. Just when one is about to generalize that the pace of the work at MITI is extremely slow, one finds something that is accomplished at lightning speed. Among the projects I participated in, the liberalization of lemon imports, for example, was accomplished in half a day. At best, one can only talk about certain trends and tendencies in discussing MITI.

At the top of MITI's structure is the cabinet minister. Next there are two parliamentary vice-ministers (seimu jikan ) and an administrative vice-minister (jimu jikan ). Below that are the bureau chiefs (kyokucho^[*] ) and then the section chiefs (kacho^[*] ), and all the assistant chiefs in the various units. The work and responsibility of the various bureaus and sections are, as a rule, quite clearly defined.

For the purpose of decision-making in the ministry there are three kinds of important regular meetings (kaigi ). On the highest level, the shogi^[*] (ministry meeting) is composed of the highest officials in the entire ministry and meets once a week. Below this is a meeting called the shomu kacho (section-chiefs meeting), which is attended by the highest ranking section chiefs in each of the bureaus. Next, there is the horei^[*] shinsa iin (laws and regulations examiner), an old word that refers to the meeting attended by the subordinates of the section chiefs. These latter two meetings are held twice each week.

Although the minister is the official head of the ministry meeting, he and the two parliamentary vice-ministers rarely attend, and the administrative vice-minister presides over the meeting. Most matters of importance, especially in general areas such as the budget and laws, are decided at this meeting. It does not ordinarily handle concrete issues.

It must seem strange that the cabinet minister does not attend these meetings, but there are frequent meetings between the minister and the vice-ministers. Their relationship is very close. The offices of the minister and the administrative vice-minister are joined by a door. Thus, the two are able to be in constant contact. Since the vice-minister meets the minister every day, he is fully informed of the intentions of the minister and often receives directives from the minister.

As a rule, the matters discussed at the ministerial meeting first pass through the two other meetings but, of course, not everything is discussed at the ministerial level. Some less important matters as well as some highly secret matters are not handled at the ministerial meeting. For example, although not a matter handled by MITI, the revaluation of the yen is a very top-echelon decision. Thus, some of the matters not dealt with at the

ministerial meetings are very important. As a rule, however, most matters do pass through the ministerial-level meetings.

Questions of who takes the initiative and who has the real power vary from case to case. Matters of differing degrees of importance are handled differently. Is it a routine matter? Should the matter be broken down into separate parts? Does the matter require a change in the system? Is it a domestic matter? Does it have international implications? Does it have political implications? Is it a matter that requires routine office work, or is it one that must be considered to the fullest extent? Is it a rare, "once only" problem? Is it something that will only happen this year? Is it a problem with long-range significance? There are other kinds of problems, but the preceding list covers the standard ones.

In some matters, lower-level subordinates have a great deal of influence. In others, the bureaucrats who have direct contact with the public—we refer to these as the madoguchi (window opening)—have a great deal of authority. Then there are matters that cannot be settled without discussion with the cabinet minister. Normally, however, there are no matters where the power of subordinates is greater than that of superiors. I can make this statement with confidence. Subordinates give their opinions freely and generously, but there are no cases where the actions of the subordinates do not reflect the intentions of their superiors. The system of lower-level drafting of ringi documents and other daily routines must be seen in this broader context.

The ringi and conferences are also required because of the problems of coordinating work that overlaps the many sections of government. If one ministry does not have its house in order, it causes trouble for the other ministries. And similarly, a bureau within the ministry can create problems for others. As a result, there is a tendency toward increasing the use of such devices as regular meetings and ringi to ensure that work is properly implemented.

The work of the bureaucracy goes through a regular cycle. From June to August of each year, we make the policies for the following year. We decide the goals for the following year and the important matters we want to work on. We make a complete schedule for the following year, including budgets, revisions of the tax system, and laws we want passed. We call this the "making of new policies." There are some things, of course, which are not new, but because we have the desire to make something that is new, we give it this name.

The request for the budget is presented to the Ministry of Finance (MOF) in August. The laws and the tax system are done a little later, but these are all part of "making new policies." By the end of the year the draft budget and tax system are settled in conjunction with the MOF. It takes from the end of the year to the beginning of the following year to make final decisions concerning the kinds of laws to be made.

This work is finished when the laws have been presented to and passed

by the Diet, the budget has been passed and the tax system revised by the Diet. Thus, when we enter a new year, the policies we have been working on for the previous year begin to take shape. Therefore, we are simultaneously enforcing the policies developed the previous year while making preparations for new policies for the following year.

There are always temporary occurrences that have not been scheduled or allowed for in the budget such as international conferences or discords that must be resolved. It is natural that these sorts of things occur, but unless new systems and policies are handled in the sort of cycle I have outlined, they are difficult to take care of. Of course, the cycle is not completely inflexible, but as a rule, if something is not in the budget by August, it must wait one more year. Thus we have to exert ourselves to the utmost from June to August. All of the bureaus and sections endeavor to find and develop desirable programs. For example, if the minister says, "Can't you come up with a better policy for small and medium enterprises?" we come up with a stack of bills concerning small and medium enterprises. And thus we go through our annual cycle.

As for the general mood in MITI, I think that it can be said that there is a large appetite for new policies. Of course, I do not mean this in comparison with the private sector; I am not qualified to make that comparison. In the government, however, I think it can be said that the appetite for new things at MITI is very large, and because of this there is a lot of friction with other ministries.

To give a recent example, there is the work that has been done on the "information industry." Then there is the plan to reduce the number of automobiles and create a new traffic system. MITI is putting a great deal of effort into these new urban systems. There is also work done on the housing industry, the ocean development industry, the leisure industry. When I reflect on these issues, I am aware that the work to develop a new traffic system is closely related to the work of the transportation ministry, the work on the information industry is closely related to the work of the postal ministry, and the leisure industry is perhaps most closely related to the work of the welfare ministry or some other ministry. These are all matters that reach beyond the confines of MITI's concerns and involve other ministries, but our mood is one of taking them up without any hesitation.

MITI likes to take on problems before others can get their hands on them. I think this is due to the open, flexible atmosphere in the ministry. From some perspectives, it can be said that MITI is conservative. Perhaps it can also be said that work should be done more vigorously. Because it is a big organization, it would be a mistake to generalize too broadly. Yet, although it may not seem so to those on the outside, within the ministry it is quite acceptable for subordinates to argue with superiors over policy. Debate is necessary to our work, and the general atmosphere supports debate. This is because persons in the lower levels of the hierarchy work in

narrow, specialized fields, and therefore they are more knowledgeable about details, and they have more time to think about their subject. It is traditional not to put down a subordinate in debate simply because of his low rank. Especially when making the budget or new policies, the atmosphere is one of eagerly looking for new ideas whatever their source.

Do superiors have any influence in this kind of atmosphere? They do if they want something done. It is similar to the situation where the minister says, "Can't you do better than this?" and people reconsider their bills and come up with something better.

There are many other examples of where the opinions of those in the upper levels of the hierarchy have an influence. I would like to relate some of my personal experience on this subject, and please excuse me if it sounds as if I am boasting. When I became administrative vice-minister, I announced the things I wanted to do most. For example, I wanted a new trade and industry policy for the 1970s. I served as administrative vice-minister from 1969 to 1971, and I felt that a new policy could be formulated during my term. The new policy was finally completed one month before I resigned. I resigned right after it was announced.

I also wanted to establish a new system for the information industry. This was met with enthusiasm by those who were put in charge of the project, and they found it stimulating. Another example was my wish to revise the patent laws. This kind of leadership is used not only by the administrative vice-minister but by the bureau chiefs and the section chiefs as well. From the time I became bureau chief, it became standard procedure to announce what I wanted to do during the two or so years in each assignment. I think this helps make the work interesting.

I would now like to turn to the question of personnel practices. There are about fourteen thousand persons in MITI. This figure includes people in the various laboratories, the patent office, and the regional branch offices. Approximately one-fourth of these are actually in Tokyo taking care of administrative matters. Of this number, about one-fifth are civil servants who have passed the highest level of the civil service examination.

I cannot say that all of the bureaucrats work hard, but certainly some of them are very highly motivated. In my view, they work very hard. It is common for them to work until eight or ten or even twelve o'clock in the evening. They have nabeyaki udon (a pot of noodles) brought to them in the evening, drink a cup of sake, and work with manly determination. Their pay is not especially high, and it cannot even be assumed that they are respected by all Japanese. Recently economic growth is looked upon as bad. Exporting is bad, manufacturing is bad, being different is bad. Even in the past, MITI's reputation was not particularly good. But these upper-level civil servants continue working until late at night. I used to tell them they were foolish.

Is the work of MITI decreasing? I always thought that the controls of MITI would decrease with trade liberalization. The total number of

employees has not changed, but the proportion of MITI officials involved in administration has decreased annually. The total figure has not decreased because decreases in administrative personnel have been matched by increases in the staff of the patent office and laboratories. With liberalization I thought there would be a decrease in the work load, but actually it seems that people are busier than ever. It is a mystery to me, but as the days pass people actually get busier. This may be explained by the fact that the society has become more complex and the demands on the ministry have multiplied.

I also wondered if the quality of the people applying for jobs in MITI might not decrease. I wondered whether MITI would lose its appeal as a place offering top-level career opportunities. But top-level students still strive to enter. So I think it can be said that there are many fools among Japanese students.

Discussion

Nagamasa Ito : Because I spent a little time in Mr. Ojimi's ministry, I would like to mention one of my impressions. I was involved in the preparation of white papers, for which an impressive quantity of good data was collected. But before publishing the white paper, there were always many complaints from the various ministries: "Don't state that so clearly," or "Take this out." The end result would be a document that made little sense. The process of selective omissions was the result of considerable effort on the part of the various ministries, but it also reflected a certain attitude toward responsibility in the bureaucracy. Actually bureaucracies do not take responsibility. If a mistake is made in administrative guidance, for example, those who received the guidance are the ones who suffer. Those who make the mistake, however, do not take the responsibility for it. It was the feeling of those working on the white paper that the bureaucracy does not like a system of clear-cut responsibility.

One other point: Mr. Ojimi mentioned that the policies desired by the cabinet minister usually pass, but from our point of view it was an incompetent system. We kept getting these people who did not know the first thing about economic problems. When Wada Hiro brought his own staff members into office, it looked like their authority was going to be based on their knowledge; but the will to work and the theoretical basis of work is lost when you work under people who speak nonsense.

Yukio Suzuki : I would like to ask about administrative guidance. Mr. Ojimi said that the work of MITI is spreading to new fields, and I think that one of the problems will be to coordinate the activities of MITI and the activities of other ministries to keep them from conflicting. But with these changes, what is happening to MITI's administrative guidance policies? What will be the shape of administrative guidance in the future?

Ojimi: Heretofore, the purpose of MITI's administrative guidance was to aid industrial development, and thus the activities of industry and the bureaucracy were mutually supportive. MITI helped in the coordination of such undertakings as exporting, equipment investment, capital supply. As that sort of work decreases, what will be the pattern of new policies? One new activity which has come to my attention is MITI's role in supplying information to industry. As the Japanese economy and the pattern of economic growth change, MITI will take on the role of supplying precise information to industry.

At the same time, MITI has made it a practice not to interfere in private industry's pursuit of profits. Now, when the activities of industry are seen in some aspects as harmful to society—in environmental pollution, for example—MITI's administrative controls will probably take on a new dimension. Since, as Mr. Suzuki said, these new dimensions are related to the work of the other ministries, in some cases, administrative guidance may require cooperative action by two or three ministries.

Suzuki: This new direction is good, but I think it will present a new set of problems for MITI. Until now MITI was helping industry do what it could not do for itself. When industry could not control its own activities, it called on MITI. It has been difficult to determine whether the control of MITI has been due to its own leadership or whether industry has been controlling itself in the name of MITI. There have been differences among the different types of industry, and I would like to have Mr. Ojimi^[*] explain the internal workings of administrative guidance a little more concretely.

Ojimi: This is a difficult question. As Mr. Suzuki said, the new direction in MITI is toward supplying information and controlling industrial activities that are socially harmful. At the same time, however, it is surprising that the necessity for administrative guidance still remains. For example, I think that it would probably be best to leave the problem of overinvestment in equipment up to the forces of the market, but this has never been tried. Moreover, it now has international implications. For example, the year before last and last year when I went to Europe, I was asked if we could do something to control equipment investment. The Japanese shipbuilding industry, for example, is still investing in equipment. I was asked at what percent of the market share Japan would finally be satisfied. Thus, advising on equipment investment is not a policy that we can easily abandon. Furthermore, as Japanese industry advances into foreign countries, new kinds of conflicts and legal problems arise. Therefore, it appears necessary to keep an ongoing dialogue with industry.

In some ways, MITI may have been used as a tool by industry, and yet there are still problems which cannot be settled without strong leadership from the bureaucracy. There are some problems that are settled simply by MITI's showing its face. An objective, neutral, third party is needed to clear up many problems. Who, if not the bureaucracy, is to play that role?

The zaikai groups? The press? The Diet? The parties? When you think about it, this is really the role of the bureaucracy.

Hugh Patrick: I have some questions about administrative guidance. You mentioned that it did not work very well when it was applied to excessive investments. Could we say that it works best when it encourages rather than restricts industry? Does it work best when its goals are those that industry wants? Does this mean that MITI is quite weak as an independent organization but quite strong when it represents business interests?

Ojimi: Administrative guidance is not so simple that we can say it works best when it encourages rather than restricts industry. We can mention examples in which MITI was tough in restricting the interests of industries by administrative guidance. With regard to overinvestment, Japanese industry tends to be overly ambitious, whether the problem is one of excessive investment in equipment or excessive competition. Administrative guidance exists to restrain this excessive aggressiveness. However, MITI policy is basically designed to help and encourage industry. Controls have been used to aid industrial development. Of course, there are cases where there is a vicious circle—because administrative guidance and controls exist, companies feel they can be excessively aggressive since there will be external restraints. There are also cases where industry has been overly encouraged and has been left with scars from overinvestment in equipment when our estimate of prospects were too optimistic. Nonetheless, MITI does endeavor to work for the benefit of industry, not for the benefit of an individual firm of the industry.

M. Y. Yoshino: In looking at the postwar history of MITI, I have been struck by the effectiveness of its leadership. But in the past there has been a strong consensus about the goal of economic growth. It has played a particular role in developing industries like heavy manufacturing and the chemical industry, and in this effort both candy and the whip have been used. The public criticism of industry concerning problems such as pollution, consumer problems, or international problems presents a completely different set of problems for industry in the 1970s and 1980s. There are problems that confront all types of industries, not just a select few. In discussing these things with people in MITI, I have been told that MITI is now making certain structural reforms. What will be the future role of MITI? The problems are different, and yet at the same time they concern the problem of the candy and the whip which are factors that make up power relations. I would like to ask Mr. Ojimi^[*] what he thinks the role of MITI will be in the seventies and eighties.

Ojimi: As you said, the way in which MITI has governed industry and the consensus concerning economic growth have complemented each other. It is easy to work when industry agrees with you and you are trying

to move things in a direction that will benefit industry. Now, however, the job is to direct industry away from economic growth toward social usefulness. Industry should be kept from polluting, from using too many natural resources, and the like. In taking these new directions, MITI may have to assume leadership because a free economy cannot solve these new problems on its own. On the contrary, as the economy progresses, public control will be required and administrative guidance as well as legislation may still be necessary.

Ivan Hall: I think we can assume that MITI does not operate in isolation from other ministries. Many policies must be decided in cooperation with the other ministries. What is the mechanism of liaison and consultation with the other ministries?

Ojimi: MITI has close relations with the other ministries. These relations are especially close with the other keizai kancho^[*] (the ministries related to economic affairs—the Economic Planning Agency, MOF, and the Ministry of Agriculture and Forestry). We also have close relations with the Foreign Ministry. As for the problem of the level at which contacts are maintained with the other ministries, this depends on the issue involved. When a new law or policy requires adjustments in the authority of two ministries, these contacts can be on the level of the bureau chief, administrative vice-minister, or cabinet minister. It all depends on the nature of the problem.

In addition to these kinds of liaison for dealing with special problems, there are also standing procedures for regular relations with other ministries. There is a renrakukai (liaison meeting). There is also a semiweekly meeting of administrative vice-ministers from each ministry. Important laws and other matters are all discussed at this meeting, and it serves an important function in the relations among ministries.

Robert Ward: I would like to have some questions about the ringi system cleared up. On what occasions are ringi documents used? At what level do they normally originate? Once written, is the content of a ringi document ever changed? Is it difficult to achieve such change? How important is the ringi document as a decision-making device?

Ojimi: To give my impressions, people in the ministries are not much interested in ringi ; it is a mundane practice. We consider the ringi document as part of office equipment along with pencils and paper. The ringi document is rarely written at the section-chief level. More commonly it is written by the person in charge of a certain matter below that level. But in some important cases it is sent to the bureau chief, administrative vice-minister, or minister, depending on the content of the document. The simplest routine matters are simply written on a standard printed form as a ringi document. And at the other extreme, covering important matters, decisions are made before the ringi is ever written and passed around. Of

course, ringi does serve to make the content of the decision clear, to put things on record, and to keep people in various parts of the organization mutually informed.

As the ringi is passed up, it can be revised. To show that a revision has been made, the person making the revision puts his stamp on the ringi . There is the story about the man who is reluctant to affix his stamp on the document, and to show his opposition he affixes his stamp upside down. I have never seen anything like this. I think that it is only apocryphal. It shows, however, that, no matter how reluctantly, most people approve a decision once it has reached this stage.

The ringi documents that go to the level of the cabinet, however, are treated with great importance in contrast to the ringi documents used daily within the ministry offices.

Taishiro Shirai: I am interested in the distribution of manpower in MITI. MITI has very capable people, and I would like to know something about the way in which these people are used. You said that the best university graduates come to MITI and that recruitment is no problem. You also said that they are trained to take on any kind of job. I think this is true. My question may be difficult to answer, but I would like to inquire about amakudari , the later entry of former MITI officials into the private sector. How are they introduced to industries? Is this done through MITI, or is it left entirely up to individual negotiation? Is it different for private industry and public groups?

Ojimi : Generally speaking, the lifetime of a top bureaucrat is not very long. I myself resigned from the ministry at the age of fifty-three. Even this was rather old compared with most of my colleagues.

Because the structure is pyramid-shaped, as one climbs to the top, there are naturally fewer posts. With very rare exceptions, we do not put a section chief below a bureau chief who is the same age or younger. This is not such a problem in private companies, but in the bureaucracy it does not work to have an official serving under a younger person. As a result, most bureaucrats, compared with employees in other organizations, resign at a young age. Therefore, they must take new jobs in the nongovernment sphere.

From the point of view of private companies, there is a need for these men. Requests frequently come to the personnel division of the ministry. Thus, placement is usually taken care of by the personnel division.

There are differences between private and public groups. After resigning, a man can immediately go to a public organization, but he must wait two years to enter a private company, or he must obtain permission from the personnel authority, which is under the board of the cabinet. This permission is usually granted; or perhaps it would be more accurate to say that the men search for companies for which permission will be granted. To obtain the permission, it must be a company with which the

bureaucrat has not had past relationships in an official capacity. It is easier, therefore, for those lower in the hierarchy and more difficult for those in the upper levels. I have no intention of seeking permission, so I am currently enjoying my two years with no job.

Most people in MITI prefer to go to private companies rather than public organizations. In discussing this with the vice-ministers from some other ministries, I have found that this trend is unique to MITI. They usually say, "Public organizations are more stable than private, most of our people would rather not go to private companies. Your ministry is rare."

Yoshinori Ide : The post that is the hardest to understand in the bureaucracy is that of the vice-minister. Looking at the bureaucracy from the outside it looks like a very elite and tough career. The position of the vice-minister appears to be the most powerful.

Depending on the ministry, the position of vice-minister is very different from that of bureau chief. Up to the position of bureau chief you have your own staff, but when you become vice-minister you lose your staff. You are alone. At the level of bureau chief it is sufficient if you act so that you protect the interest of your bureau. The vice-minister must represent the entire ministry.

You mentioned that when you became vice-minister you announced the policies you wanted during your term. Did you have your own staff in this case? In some ministries, even if the vice-minister proposes certain policies, the absence of a personal staff makes the implementation of these proposals difficult. I would like you to comment on some of your own personal experiences in this regard.

Ojimi : Although the vice-minister can use every part of the ministry, the ministry secretariat is located nearby and he relies on them heavily. The secretariat summarizes policies and daily administrative matters, and there are also sections in charge of matters like personnel and public relations. Moreover, there is a planning office and a research section. The relative strength of the secretariat is different in different ministries. In ministries where the secretariat is strong there is unity in the ministry. When the bureaus are strong, there is less unity. I am not saying which is good or bad because that depends on the work involved.

Anybody who becomes vice-minister has thought about the policies he wants to pursue before he reaches office. When you are in the ministry for a long time and have risen through the ranks—I was a bureaucrat for thirty years—you have ideas and you direct the secretariat accordingly.

If your question is whether or not there is a cleavage between the vice-minister and bureau chiefs which isolates the vice-minister from those below, I will have to say that this is absolutely not true. The administrative vice-minister has the highest authority on all administrative matters. This comes from the position, not from his personality. This is probably not a

very good example, but in the case of a power struggle between ministries, it is difficult to find an arbitrator. In a power struggle between bureaus within the ministry, the vice-minister has clear authority to straighten things out. Of course, the vice-minister tries to refrain from rulings which will cause dissatisfaction, but his rulings generally settle matters.

Ezra Vogel : I am interested in the new problems MITI will face, such as environmental protection and consumer protection. I understand that MITI has undergone reorganization to deal with these problems. I have also seen an American article that said that dealing effectively with these problems in any country will require a higher degree of government control than anticipated. What kinds of groups do you envisage working with these problems, and what leverage will the government have in dealing with these problems?

Ojimi : The Kankyo-cho^[*] (Environment Agency) of the cabinet is concerned with environmental problems. In MITI we have the kogai^[*] hoan-kyoku (Environmental Protection and Safety Bureau). In addition, we have the Chemical Industry Bureau, the Minerals, Oils, and Coal-Mining Bureau, and other specialized bureaus of this sort that can deal with pollution problems in the respective fields. The Environmental Protection and Safety Bureau stands between the various other bureaus in MITI and the Environment Agency of the cabinet, which administers overall policy. One goal of MITI's current reform efforts is to strengthen the sections in charge of environmental and consumer problems. The Diet will also develop new legislation to deal with these problems. I am confident that MITI will be organized to deal effectively with problems of pollution and consumer protection.