Functional and Dysfunctional Aspects of Government Bureaucracy
Albert M. Craig
There is no language in the world in which the word "bureaucrat" means something good. In Japanese the word kanryo[*] has exceedingly unpleasant overtones. It suggests pettiness, self-importance, narrowness, and formalism—attributes, in the Confucian phrase, of a "small man." Japanese historians tend to view the modern Japanese bureaucrat as the willing tool of all of the villains of history from the absolutist leaders of the early Meiji to the undemocratic party leaders of the Taisho, the militarists of the thirties, and the conservative party politicians of today. In the historical literature perhaps the only figure that rivals the bureaucrat as a subject of opprobrium is the "parasitic landlord." Some critics even suggest that the bureaucracy has dominated policy formation, bringing to heel the elected political leaders who are nominally in charge of policy.
One may object that both "bureaucrat" (kanryo ) and "official" (yakunin ) are pejorative terms. Kanri , which also may be rendered as "official," sounds much better. It has a dignified ring; it suggests capability, steadfastness of purpose, and trustworthiness. It was the term used in the Meiji constitution to speak of "the officials of the emperor." But it is not the term that enters the mind of the average Japanese when he thinks of Japanese officialdom.
Even more critical of bureaucracy than the writings of postwar historians is a second large literature written by ex-bureaucrats and newspaper reporters to expose the foibles, failings, formalism, and frustrations of bureaucratic life in Japan. This genre of books elucidates what is wrong with Japanese bureaucracy. It gives firsthand illustrations of
the dysfunctions that can be found in government administration. If Japanese bureaucracy did not work, this literature would tell why.
During the past few years I have been studying early Meiji government and bureaucracy. In connection with this study, hoping in some measure to triangulate back from the present, I have read most of this exposé literature, and I have also spent several months visiting Japanese government offices—at the local, prefectural, and national levels—and talking with government officials. This paper is an attempt to reconcile what I have read with what I have seen and heard.
I would stress in advance that I am not out to whitewash Japanese bureaucracy. It does have dysfunctions. Japanese officials all agree that they exist. There is some truth in the claim by Japanese scholars that Westerners, seeking to explain Japan's "economic miracle," sometimes adopt an overly rosy view of the Japanese ability to cooperate and work harmoniously for commonly held goals. Even so, in comparison with most bureaucracies in the world, Japanese bureaucracy does get things done. The question must be posed: given its dysfunctions, why does it work as well as it does?
An Elite Bureaucracy
Weber argued for the legal character of bureaucracy. His characterization fits Japan rather well. Whether in the Ministry of Labor or the Ministry of Finance, the top career bureaucrats tend to be law school graduates. Their life as officials is governed by regulations and ordinances, which they observe and obey. Their work consists of drafting laws, planning the projects that will be embodied in bills, and enforcing laws already passed.
But many other matters also affect how bureaucracy functions. One is the prestige that the official enjoys in his society and the way it helps or hinders recruitment. In the Tokugawa era (1600–1868) officials were ranking samurai, the elite within the military aristocracy. After the Restoration, government officials were, perhaps more than the army, the legitimate heirs of the samurai. For a time after the Restoration even local post-office officials wore swords. In 1876 one government leader wrote: "Carefully observing today's situation, the peasants, the merchants, the samurai, all under heaven are dissatisfied . . . only officials are pleased with their lot." There was ample reason for their satisfaction: they were
the officials of the emperor and partook of his glory. Higher officials, from a slightly later period, had fancy uniforms with shiny buttons, braids, and swords to wear on ceremonial occasions. Their pay was high. Even a lower official (hanninkan ), Ukai Nobushige has stated, could afford to visit geisha. It was not until the 1920s that the salaries of company managers pulled ahead of those of government officials at the same educational level.
After World War II the pay of bureaucrats declined relative to other sectors of society. They were redefined in the 1947 constitution as "servants of the people" (kokumin no koboku[*] ). They were stripped of their symbolic perquisites. Decorations, for example, were abolished for a time. And, reflecting the decline in their livelihood and morale, incidents of corruption or bribery, exceedingly rare before the war, began to be reported. Yet many of the best graduates of the Law Faculty of Tokyo University continued to enter the bureaucracy. Perhaps only in France and Germany did officials have a comparable sense of themselves as an academic elite.
Imai Kazuo, a former bureau chief in the Ministry of Finance, recounts an occasion when a student, armed with a letter of introduction, called on a bureau chief in a central ministry in the hope of obtaining a job. He was asked about his university record and then dismissed with: "You haven't got a chance with only that number of As. I had seventeen. The famous Professor So-and-so at the university had only fifteen, a considerably poorer record than mine." The student left in chagrin. When first told of this conversation, Imai remarked on how true to life it was. The same consciousness is reflected in the more recent words of a ten-year MITI bureaucrat who asserted: "We [graduates] of the [Tokyo University] Law Faculty are the most Japanese of Japanese" since Japan is essentially an "examination society."
Within the bureaucracy there was and is a sharp cleavage between the elite of career officials, who have passed the special higher examination, and lower-level bureaucrats. Distinguishing between these two levels enables one to resolve many contradictory statements about Japanese bureaucracy. I arrive at a bimodal view: of exceedingly able men directing the work of the central ministries, but much less able men in the offices of local government; of graduates from the two or three best universities versus those from lesser schools and, at a lower level yet, high school graduates; of generalists versus specialists, technicians, and clerks; of relative freedom in creative work versus mechanical, rote tasks; of the satisfaction of power versus the frustrations of a narrow routine. Of course, the bimodality is not simply between the central ministries and local government. Those who will reach the highest appointive positions in the
central government will spend some time in prefectural-level offices. There are planning and executive posts at the prefectural level that are highly demanding, and many of the sections of the central ministries are filled with clerks, assistants, researchers, and temporary employees performing the most routine kind of work.
The elite bureaucrats move frequently from post to post and often occupy certain positions which are, as it were, on a special track, reserved for the most promising careerists. In the late Meiji period, a Tokyo University graduate might enter the Home Ministry, then become the assistant chief of police in a small city, move back to a different bureau in the ministry, then to a prefectural government post, and so on. Today, a Finance Ministry official may have a similar career pattern—moving from the ministry to a brief appointment in a prefectural tax office, then back to the ministry, then again to a prefectural office, and then back again to the ministry. Even after the Occupation separation—along American lines—of central and prefectural government, this type of transfer of officials from the central to the state level still continues.
The special aura of power that still surrounds the elite administrators can be explained partially in terms of their postcareer pattern. There is an unwritten rule in the bureaucracy that university graduates who entered in any given year cannot serve under men who entered at the same time or later. Since bureaucracy is pyramidal—the number of posts at each higher rank decreases—this rule means that those of each class passed over for promotion must be retired. This resembles the system in the armed forces of the United States. Some of those sloughed off in this fashion are kept in service for a while longer by postings to high positions in prefectural governments. But even the few who become bureau chiefs or vice-ministers, the highest posts in the system, are usually retired in their early or middle fifties. These men, the elite of the elite, often receive their rewards for loyal service after retirement. Some become the directors of corporations, receiving fees considerably greater than their former salaries. Some are appointed as members of semi-official advisory commissions (shingikai ). A few begin a political career and make it to the Diet, and a handful achieve the eminence of a cabinet post. Because such postretirement careers are the pattern in Japan (some ministries are better situated for this than others), even the junior bureaucrat who has passed the higher examination is viewed as a possible future member of the select company that defines Japan's national goals. This contributes to his status,
even though his salary may be less than his opposite number in Mitsubishi.
Because of the variety of career patterns, even among the higher officialdom, there is no unanimity about the merit of life in the bureaucracy. One official of the prewar Home Ministry privately compared the life of the official to "soaking in lukewarm water." It lacks the satisfaction of a good hot bath, yet "as long as one remains in it, one will not catch cold. But if one loses his patience and jumps out, he will invariably come down with a cold." On the other extreme the editorialist Akimoto Hideo once rode on the bullet train with a budget examiner, one of the most powerful officials of the Finance Ministry. The official suddenly told him to look out the window. "See that bridge over there? I built it." A few minutes later he pointed out: "See that road? The wide one. That's my work too." Then after a while he said again: "See that windbreak forest over there? That was one of my most difficult jobs." Akimoto noted the expression of consummate satisfaction on the face of the official. Between these two extremes are the observations of a young career official in the Foreign Ministry:
We climb the hierarchy with exactly the same speed. The question is which post one is assigned to. This is not an absolute indicator, as the Foreign Ministry has the policy of assigning career officers alternately between good (Europe and the United States) and not so desirable (Africa, some of the Asian countries, and South America) posts. As we climb with the same speed, there is no real competition, although almost all of us, having gone through a very competitive educational system, are competitive in a good sense. That is, everybody is a genuinely hard worker, disliking easy posts. Usually we are intelligent, but, surprisingly, some of us are not so intelligent. Because we are given reasonably responsible and important
jobs while in junior grade, the stupid ones become conspicuous at once. They are not, however, punished, at least in salary or grade. This kind of promotion continues until we become counselors. From then on it is luck.
We share the same interests both in personal matters and professionally. Over dinner or cocktails we talk a lot about foreign affairs and are quite willing to be critical of the government, though we aren't to people who might quote us. The atmosphere of the office, either in Tokyo or abroad, depends a great deal on the personality of the men, particularly of the chief. Generally speaking, discussion is free. We are invited to dissent. The level of discussion is usually high. For example, I am in charge of such and such a matter and am expected to know the facts about it. Facts are important. Treaty clauses, technical details of strategic thinking, dates, figures, etc., are considered more important than sheer speculation, although speculation, too, is expected of us. We often say that if an officer is incapable of becoming an expert in six months concerning the subject matter of his assignment, he shouldn't be taken seriously. The majority of the officers accomplish this mark with ease.
When one talks with the higher officials of other ministries, the content of their work may vary, but the sense of competence and self-confidence they project is much the same. In this respect they are not unlike Japanese business leaders.
Is this elitist consciousness appropriate in a democratic polity? Many Japanese say that it is not, arguing that bureaucrats tend to look down on civilians from their position of superiority. This is summed up in the old maxim, "officials are honored and the people are despised" (kanson minpi ). It is not that the populace distrusts the bureaucracy—though some on the left do. Most recognize its competence and give it a measure of respect. It is not too much to say, in fact, that many in the opposition parties dislike it because of its competence. But all complain of the arrogance of officials. The resentment against this arrogance may be the most seriously dysfunctional aspect of the whole system.
Masuda Yoneji, a onetime official in the Ministry of Labor, wrote that after he became section chief, visitors to the ministry would bow deeply and speak to him in exaggeratedly polite language as if he were "a member of a different race." When he went to inspect a textile mill in Aichi, he was made to feel a degree of superiority and satisfaction as never before in his life. He was met on the train platform by the section chief, a ten-year official, and his two aides from the local government office. They treated him politely, bowed, carried his briefcase to the waiting car, and escorted him to the local inn. After he bathed, he was visited by the works manager and section head in charge of labor affairs of the factory he was to inspect. They called in geisha, plied him with drinks, and in general treated him with such a combination of respect and deference (English does not do justice to the expressions used) that for the first time in his life he felt the "indescribable pleasure" of embodying in himself "the power of
the state." Imai, after describing instances of the same kind of obsequious behavior in even more loving detail, offers an analysis of it:
In the course of such experiences—like starting to smoke or taking up the habit of an evening drink—one at first feels a little ticklish, but before long it begins to feel good, and one feels that something is missing if he isn't treated in this way. Next one feels an inward dissatisfaction, and in the final stage, one advances to the symptom of indignation. It is exactly the same as addiction to a drug. . . . The more one is a petty, self-righteous type (ki no chiisai zennin gata ), the more likely he is to fall prey to this disease of "bureaucratic mentality" and the worse will be its ravages. . . . And almost no one is entirely immune.
Nor would it exaggerate to say that there are some who look forward to catching the disease. In 1972 a student who had passed the entrance examination for Tokyo University was interviewed on television and asked about his future. He replied, and his face was radiant as he spoke: "I've been accepted by the Law Faculty. In the future I'll pass the exam of the Ministry of Justice and become a judge. As a judge I'll be a god. I'll have the power of life and death over men. I'll be able to move society in any direction I please." In this response there is an element of brashness and an element of black humor, together with a large measure of overoptimistic anticipation. Yet it is not wholly off the mark. The entering freshman in the Law Faculty of Tokyo University, if he perseveres, stands a good chance of becoming a judge. Judges in Japan are officials of a kind. The path to becoming a judge is separate but not different from that into the Ministry of Justice. The kind of authority exercised by a judge and the unassailable character of his position is, like that of other officials, based on a legal monopoly of certain powers. The potential of those officials who fell prey to the "disease of bureaucratic mentality" to act arrogantly stemmed from a system that, until recently, had few political checks on the use of this power.
Since Japanese officialdom is characterized by bimodality, its relations to the clientele it serves are also of two kinds. Higher officials deal mainly with other officials and politicians, or with corporations and other large organizations. They rarely come into contact with the average citizen. The attitude of the higher officials toward, say, corporations is determined by a combination of law, custom, and politics. As in most countries, most laws are not strictly enforced most of the time; they function as guidelines or limits. Bureaucrats could throw the economy into chaos if they began to implement strictly all of the laws for which they are responsible, just as police can start a crime wave by enforcing all of the laws in the criminal code. Of course they do not. Yet because of the unused discretionary power of the bureaucracy, companies large and small take great pains to avoid
falling into its bad graces. Businessmen employ a precautionary politeness in dealing with officials. They assume an inferior status and treat even low-ranking officials with an exaggerated deference—as if they were ministers of cabinet rank. This has been brought to a high art. It is the safe way of manipulating officials. It is seen as a low price to pay for getting along with a bureaucracy that is largely honest and supportive toward business. But it is resented nonetheless, for businessmen feel that it is they and not the bureaucracy that are the propulsive force in today's Japan.
The attitude of the local bureaucracy toward its civilian clientele is perhaps the more serious problem. Whether a Japanese is going to the district office for a copy of his birth registration certificate or to the local tax office, he goes in some degree as a supplicant. If he does not act as one, he can, depending on the circumstances, be made to wait or told to come back another day. The official is doing him a favor. The official tends to see the power of the office as his personal power. The resentment engendered by this kind of treatment is widespread and affects the Japanese view of government. This is far from being as uniquely Japanese as the Japanese imagine. In good measure it is the behavior of the petit fonctionnaire anywhere. It is especially characteristic of countries where democracy is recent and is predated by a bureaucratic tradition. Yet perhaps it is more visible in Japan where degrees of politeness can be precisely measured by the depth of bows and the incremental use of honorific language.
In Japanese society at present there are some trends that run counter to the tradition of bureaucratic arrogance. Local government in the early postwar years was predominantly in the hands of conservative politicians who, appealing to all of the voters, were not formally identified with a party. Recent local elections, however, especially those in the larger cities, have become politicized; the power of the conservatives has been challenged. To attract voters, many administrations have adopted a new service orientation toward the citizenry. "Progressive" politicians, such as the mayor of Kyoto, have established "citizen consultation offices" (shimin sodanshitsu[*] ) to handle complaints about broken roads, garbage, or whatever. Conservative mayors have reacted by setting up similar offices. The mayor of Matsudo in Chiba Prefecture called his the "do-it-right-away section" (sugu yaru ka ). Through such small changes the attitudes of officials are being democratized little by little. The outbreak of "residents' movements" during the early seventies in protest against pollution is a parallel development. As these movements turn to the electoral process,
local government officials move further in the direction of accommodating public interests.
Vertical Relationships and Cliques
Japanese officials are Japanese and bring with them into bureaucracy patterns of behavior characteristic of their society. If the laws, ordinances, and regulations constitute the formal system of the bureaucracy, then these patterns of social relations that affect official behavior may be called the informal system. Two aspects of the informal system are so important to the way Japanese government functions that they merit special comment. One is the vertical personal tie; the dysfunction associated with this is cliquism. The other is the solidarity of the office, which gives rise to interoffice jealousies and struggles over jurisdictions.
Japan's premodern society was organized about the vertical personal tie. Not only did this "feudal" bond define the relationship between lords and their samurai vassals, but it encompassed other relationships as well: that of master artisans and their apprentices, of merchants and their clerks, and so on. Within the domain governments, personal ties also formed between senior and junior officials. These became the basis for the political cliques which played a constant role in the politics of that age.
One view of government in premodern Japan holds that it was essentially feudal, however encrusted with laws and bureaucratic practices. If one follows this interpretation, then the transition to the more legalistic bureaucracy of the Meiji era becomes a sort of quantum jump. A second view argues that the late Tokugawa government was essentially bureaucratic, though with a great variety of lingering feudal survivals. This view permits a more evolutionary interpretation of the formation of the modern Japanese state. Yet even this second view must recognize that personal ties remained important after the opening of the modern era. When an early Meiji leader moved from one post to another, he took with him a number of his "men." By mid-Meiji this practice was discouraged as disruptive of order within the ministries of government. Yet as Roger Hackett has shown in his analysis of the "Yamagata machine," personal ties only slowly diminished in importance. Cliques were found in most ministries as well as in the services during the troubled years of the thirties, and, in some measure, still exist in most ministries today.
When a new class of university graduates enters a ministry, they do not join a clique immediately. Rather, they spend ten years or so in one or another post learning the work of the ministry. During this period they establish working relationships with their seniors. Seniors want able juniors. By the time a junior becomes a section chief, he will probably have established particularly good relationships with one or two senior officials. When the senior official becomes a bureau chief or vice-minister, he may recommend those juniors who are close to him for key positions. And after
the senior official has retired, if he should enter the Diet or the cabinet, or join a government commission, these relationships may become even more important. Perhaps the essence of the personal clique is that it creates an unofficial link between the bureaucracy and the world of politics.
Viewed in qualitative terms, what is most striking about the personal tie is the easiness of the relationship between junior and senior. This easiness sustains an unimpeded two-way flow of communications. This is a critical consideration for Japanese bureaucracy and contrasts with the situation in some other countries. Michel Crozier's study of French bureaucracy, for example, found that egalitarian sentiments were so strong in France as to produce "strata isolation" and a breakdown of communications between different levels in its bureaucratic hierarchy. In India the haughtiness or abruptness of senior officials often makes them unwilling to listen to what their juniors have to say—leading to a serious lack of feedback within the Indian bureaucracy. In Japan, however, the weakness of the sort of egalitarian sentiment that would require the self to hold those who are not equals at arm's length makes vertical communications less difficult. Language reflects the absence of barriers. Once their relationship is established, the senior will speak to the junior in familiar terms (calling him So-and-so kun ). This suggests a paternalistic warmth and kindly concern for the future of the junior, his training, and his welfare in general. The junior accepts this, is respectful, and works hard. At moments he may even show a kind of amae (active dependency) toward his superior. Of course, the emotional content in such relationships is not usually apparent. There are circumstances when it can be expressed, but most call for businesslike formality and impersonality.
Another related factor contributing to the ease of the vertical personal relationship in Japan is the relatively easy acceptance of status distinctions. When I have suggested this explanation to Japanese friends, they have usually disagreed with me, arguing that they resent status distinctions as much as anyone. Yet I feel that what they find unacceptable is not status per se, but certain kinds of behavior by persons in high-status positions. To put this in a comparative context, there is a well-known study in which a sociologist compared human relations on a British ship and an American ship. He found that the American ship had a more elaborate set of rules regulating the behavior of the ship's personnel. His explanation was that the American sense of egalitarianism is such that more rules are required to produce the order that the British obtained with less effort due to their ingrained sense of class. In terms of this comparison the Japanese are more like the British—though in Japan it is distinctions of status, rather than class, that are recognized and respected. A Japanese ship, I would guess, would require even fewer rules regarding the proper
behavior due seniors than the British ship. At the same time the Japanese ship would probably go beyond either the American or British ship in drawing up a uniform system of status rankings. The use of court ranks gave all Meiji officials fixed positions in a unified hierarchy of statuses from the late 1860s. When court ranks were dropped, a standardized nomenclature for positions was substituted. When this was discarded during the Occupation period, officials frequently complained of not knowing the meaning of the names of positions on the meishi (name cards) of other officials.
Alongside the personal cliques within Japanese bureaucracy, overlapping them and often confused with them, is a second kind of grouping that is also called a clique in Japanese. I call these the official cliques. During the Meiji and Taisho eras there were the Satsuma and Choshu[*] domain cliques (hanbatsu ), and from the middle of the Meiji era until the present there were school cliques (gakubatsu ), particularly that of the Law Faculty of Tokyo University.
The essential distinction that I would draw between the official clique and the personal clique is that while the official clique may contain networks of personal ties, it has an objective base external to the bureaucracy. The personal clique does not. The balanced recruitment of officials from Satsuma and Choshu was not solely a matter of balances between offices, but was part of a larger equilibrium on which the new state was built. It reflected the fact that these two domains had the balance of military strength in the country and controlled access to the emperor. Once in the government, Choshu officials usually joined personal cliques under other officials from the same domain. But they also recruited able men from other domains into their own personal cliques. Okuma[*] , for example, was first attached to the personal clique of Kido of Choshu and then to that of Okubo[*] of Satsuma. He had Choshu men in his own personal following even while he was a follower of Okubo. Even in the early Meiji years personal cliques were not congruent with official cliques.
The distinction was even clearer in the case of school cliques. Tokyo University was established as the training ground for the bureaucracy. The "Tokyo University clique" was always more the name for a system of preferential recruitment than it was a functional bureaucratic clique. The
cliques in the Foreign Ministry, which during the 1930s stood in opposition to one another regarding government policy, were all, basically, Tokyo University cliques. Even today the distinction between personal and official cliques continues. Of course, it goes without saying that "old boy" ties did not hurt. A graduate of the Tokyo University Law Faculty entering a ministry was a kohai[*] (later graduate—junior) vis-à-vis senpai (former graduates—seniors) already established in the ministry. They had a common ground on which to build a relationship. There was a presumption that the junior would be talented, whereas an "outsider" would have to demonstrate his ability. If matters went poorly, a man not from Tokyo University might still feel himself an outsider ten years after entering the ministry.
Because of the historical resentment against the Sat-Cho[*] cliques, because of the resentment against Tokyo University, because official cliques are confused with personal cliques and personal cliques are seen as running counter to the public interest, cliques are much talked about as an evil in Japan. Critics argue that cliques prevent the recognition of talent. They see the bureaucracy as a system in which preferential recruitment leads to preferential promotion and then to differential rewards. Others see in the ethic of personal loyalty a negative survival of Japan's feudal past. Matsumoto Seicho[*] , a socialist and long-time critic of Japanese bureaucracy, could write a plausible detective novel about a government office in which the assistant section chief shoulders the blame to cover up a crime committed by his superiors.
Bureaucratic cliques, however, are not simply feudal survivals. They are tolerated because they have positive functions as well. One is to bypass an occasional blockage up-and-down the organization by forming a conduit for communications outside of channels. Another important function is lateral communication with a high level of trust. The coordination of work on a horizontal axis is often difficult within Japanese bureaucracy since vertical ties are so important that they always take precedence. But if the chief of one bureau was formerly the section chief in another bureau, he may well know its present section chief and will certainly know some of its permanent lower officials. This may enable him to reach them directly without going through the other bureau chief, especially if he is close to the present section chief. His effectiveness as a bureaucrat depends in some measure on the cultivation of such personal ties. (One of the arguments constantly heard within organizations in Japan against the recruitment of persons not fresh out of university is that they will not be able to function effectively since they will be strangers in the organization.)
Personal cliques are limited to the confines of a single ministry since officials are not transferred from one ministry to another. Consequently personal cliques are of no use in coordinating work between ministries. But personal friendships or the official clique are sometimes of use. If an
acquaintance from the same class at Tokyo University is in another ministry, a short telephone call may accomplish what would take days or weeks if sent up, over, and down, through channels. Phone calls, of course, are made constantly even when personal ties are lacking, but jurisdictional sensitivities are so acute that they are often ineffective. Thus, when a bureau in, say, the Ministry of Agriculture and Forestry has business with a bureau in the Ministry of Finance, the bureau chief may ask his subordinates if they know anyone in that bureau. Or officials in different ministries who did not know each other in school may establish a working relationship on the ground of having attended the same school. In a variety of ways, the informal system within the bureaucracy complements and is necessary to the formal system.
Solidarity and Jurisdictional Jealousies
A second major characteristic of Japanese social relations is work-group solidarity—the sense of common purpose, cohesion, and belonging that unites a section, bureau, or ministry. The dysfunction associated with this is a we-versus-them attitude toward other offices or ministries that often makes cooperation difficult. There are various terms in the literature which describe this; each involves a slightly different context and perspective. If the focus is on the powers of an office and the extent of its authority, then "the roped off area" (nawabari ) or "the limit of authority" (kengen ) may be used. If there is a struggle between two offices over a conflicting jurisdiction, then kengen arasoi may be used. If the autonomy of the ministries is under discussion, then the term is kakkyosei or "sectional independence," a term used in earlier times to refer to the independent power of regional feudal domains.
The keen awareness of jurisdictional limits is not new in Japan, and certainly not unique to Japan, though office solidarity may make it stronger in Japan than elsewhere. Even in the Edo period in the regulations of the bakufu exchequer (kanjo bugyo[*] ), great care was taken to spell out the specific functions and the limits of competence of its various suboffices. An English engineer working for the Ministry of Public Works during the early Meiji period described the same scrupulous concern for jurisdictions—almost as if they resembled the boundaries of fiefs—in the following words: "The Vice-Minister of Public Works was himself in no
way connected with the project, owing to the curious mutual jealousy of departments and consequent duplication of administrative arrangements constantly to be remarked in Japan. . . . " Even as the bureaucracy became more modern, these intraministry jealousies did not disappear. Before World War II an official in the Ministry of Finance was sent to another section of the same ministry to borrow some statistical materials, which that section had collected from all of the prefectures in Japan, but which it no longer was using. The request was turned down by the chief of the other section, whose last words were: "If the materials are so necessary, why doesn't your section notify the prefectures and collect them separately?" The conclusion of the official, albeit slightly overstated, was that the jurisdictions of Japanese offices are, like the person of the emperor, "sacred and inviolable" (shinsei ni shite okasu bekarazu ).
Between ministries, competition and jealousies are even more frequent. Ministries have varying levels of prestige, and the Finance Ministry is the most powerful and the most prestigious because of its authority to approve or disapprove of not only the general budgets of other ministries but also of their specific projects. Other ministries resent their dependence on it. When meetings must be held between officials of different ministries, the question of who should come to whom is exceedingly delicate. Also, the question of whose approval to get first is a touchy matter. If one office feels slighted or taken for granted, then it may make trouble. During World War II, Ayukawa Gisuke was put in charge of Manchurian heavy industry, taking it over with a "force that would stop a bird in flight." Yet when he came to Tokyo with his yearly plan, he had to repeat the same explanation over and over tens of times, visiting each of the ministries concerned. He also had to proceed in the proper order and call on them according to the convenience of their bureau chiefs. When busy, they did not give him an appointment on the hour and day requested. The entire process required more than a month. That so powerful and dynamic a figure as Ayukawa was subjected to such treatment in wartime, one author writes, makes one realize how staunchly the splendid bureaucratic tradition of "protecting one's territory" is upheld.
The exposé literature abounds with examples, such as those given above, of the dysfunctions inherent in jurisdictional jealousies. Yet even such prickly antagonism toward organizations other than one's own has a silver lining—the strong positive identification with one's own office and with its goals. When there is work to be done, Japanese officials work long hours; I have walked through the corridors of several ministries at six or seven in the evening and have been surprised at the number of officials still at their
desks. They feel their work is important and are proud of it. They feel that they are a vital part of an enterprise. And their awareness of belonging to the little society of the office is reinforced, as Nakane Chie has described it, by drinking or playing mahjong together after hours, or by office outings to the sea or a hotspring once or twice a year.
How then is this office solidarity reconciled with cliques? The answer, first of all, is that the office in which junior officials, clerks, typists, and researchers work together—or even the section with much coming and going among several closely grouped rooms—is below the level of cliques. The section chief may be particularly close to one or another senior, but the personal clique stops with him. (The assistant section chief will also give a special kind of personal allegiance to his boss, but, because of his limited career mobility, he is not usually considered a clique member.) Among the higher posts in the ministry there is also a kind of solidarity or esprit de corps. Arising from the face-to-face contacts of the higher officials, their sense of mission, and their elite consciousness, this sense of solidarity is what binds the ministry together. Ministerial solidarity is always in a delicate balance with personal vertical ties. As the higher officials move about from post to post, they must work now with one man and then with another. Particular vertical ties are never permitted to become so strong that they interfere with work relations. To the extent such ties are seen as related to official cliques, they are criticized—as the intrusion of particularism where only merit should count. To the extent they are seen as personal cliques, they are more often interpreted positively as good senior-junior working relationships of the kind that contribute to the accomplishment of the ministry's task.
Much of the writing on decision-making in Japan has focused on the defects of the ringi system—the procedure by which papers are passed up and down the line, from section to section and bureau to bureau, until they have gathered the required number of seals of approval. In the paragraphs that follow I would like to suggest that this emphasis is more an obstacle than an aid to our understanding. It makes Japanese office procedures mysteriously different from our own. Before turning to the internal workings of bureaucracy, however, it is necessary to touch briefly on the political context of Japanese bureaucracy.
Weber said that above every bureaucracy is a political system that sets the goals. This is clearly true in both Japan and the United States: the Diet and Congress pass laws; the respective administrations see that the laws are carried out. Yet there are significant procedural differences. In the United States bills may be drafted by congressmen (Taft-Hartley, Burke-Hartke) or by the president's White House staff, as well as in the various departments of the federal government; in Japan the overwhelm-
ing majority of bills are drafted by bureaucrats in the ministries. If the drafting of bills is a political function, then in Weber's terms, part of the Japanese political system is found within the higher bureaucracy; if it is not, then a part of the American bureaucracy is located within the political system, above the departments of government. It is possible to resolve the two alternatives by saying that the Japanese bureaucracy performs staff functions for the political leaders of a kind not done by department bureaucrats in the United States. But "staff functions" is a vague term. If it means the actual drafting of laws, then does it not betoken at least a partial role in the setting of goals? In any case, it is clear that the central ministries of state in Japan are considerably more powerful than the equivalent American departments.
A second major difference is the degree of insulation from politics. The American department is open at the bottom, open at the middle to men with experience, and at the top it is infiltrated by political appointees down to the assistant secretary level (the equivalent, perhaps, of the Japanese bureau chief). In contrast, the Japanese ministry is a closed body. It recruits only at the bottom and takes only virgin labor—fresh out of school and plastic. At the top of each ministry there are three nonbureaucratic posts: the minister who is in the cabinet and two "political vice-ministers" from the Diet. These are powerful figures, yet by and large these men deal with the ministry through the bureaucratic vice-minister. They do not penetrate the ministry; the ministry maintains its insulated corporate unity beneath them; it is not politicized.
One reason for the weak politicization of the bureaucracy was its prewar tradition of neutrality; the laws that framed it were designed to keep it separate from politics. But perhaps more important was the fact that throughout the postwar period the Japanese bureaucracy has had a single master, which it has been able to serve with a rare singleness of mind. Had power alternated between parties with different programs, it would have been necessary to develop mechanisms within the bureaucracy to handle the shift of policy. Whatever form these might have taken, the consequence inevitably would have been the politicization of the upper levels of officials in the ministries. Since this has not been necessary, the result has been a bureaucracy that is both conservative and apolitical and that has worked in harmony with a series of conservative administrations.
Japanese bureaucrats would agree with the description of the bureaucracy as apolitical. They emphasize that Japanese bureaucracy is not racked by the dissensions of party strife. They see themselves as operating above politics in the national interest. Occasionally a bureaucrat will suggest that the factions within the Liberal Democratic Party (LDP) are the equivalents of parties in other countries. After a shuffling of cabinet portfolios, a new minister may put in "his man" as vice-minister or as bureau chief in a key bureau. Yet his man will be a career official whom he knows, who can work with those already in the ministry, and who has the seniority and experience needed for the appointment. Such an appointment usually has few implications for policy. And often dramatic changes occur in the cabinet and in national policy without any corresponding shifts of personnel within the ministries. When Tanaka became prime minister, for example, Japan's China policy turned completely about. However, hard-line officials in the Foreign Ministry with ties to the Fukuda clique did not lose their positions. They continued to handle China policy. But the policy they made and the speeches they gave in defense of it were markedly different in content.
Bureaucrats, however, protest the label of "conservative," arguing that they have a sphere of autonomy and do not look simply to the LDP. In drafting a bill, for example, they often check with the socialists as well as with the LDP. Officials also point out that, from time to time, the bureaucracy is successful in opposing the policy directives of LDP organs. Even the socialists, bureaucrats argue, recognize their fairness and their concern for the national interest. I feel that the preceding points are not untrue, but need some qualification. Token coordination with opposition parties is a way of helping the LDP avoid the charge of "tyranny of the majority" on the floor of the Diet. Small changes in a bill that is not controversial may even enable the government to obtain socialist support for the measure. The socialists' recognition of the fairness of the bureaucracy—to the extent that this is recognized—is a recognition that the bureaucracy is as national or as impartial as they could expect given LDP control of the government . Bureaucratic opposition to LDP policies is, in fact, very small. Consider the case cited by one official in which the Ministry of Agriculture and Forestry resisted the demands of the Agricultural and Forestry Division (Norinbukai[*] ) of the LDP Policy Affairs Research Council (Seimu chosakai[*] ) for higher prices for agricultural products. Such prices are a subsidy to farmers who vote conservative. The successful resistance by the ministry cannot be interpreted simply as bureaucratic independence of the LDP. It must be seen as a minor defeat for LDP farm interests in order to achieve a balance with growing LDP
urban interests. Too much pandering to the farmer, a declining percentage of the population, would weaken the LDP in the cities.
Qualifications such as these suggest that it is not unfair to apply the label of conservative to the higher bureaucracy. Most, though not all, of its members make no bones in private about their support for the LDP. They see the LDP as the party closest to the national interest, and they are willing and efficient in carrying out its policies.
Can one, then, not go a step further and argue that the bureaucracy has been permitted to maintain its substantial autonomy and powers because of its willingness to act for the LDP? This question can be examined in terms of where the initiative comes from when a bill is drafted. Is it from the bureaucracy, from the party by way of the divisions of the Policy Affairs Research Council, or from the commissions made up of businessmen, professors, Diet members, and retired bureaucrats? The answer varies. For a politically neutral matter—a law intended to aid the implementation of other laws—the initiative may come wholly from within the bureaucracy. For a political sensitive matter, such as the violence in the universities during the late sixties, the LDP will define the general sense of what is to be done, and the Central Educational Commission will provide specific policy guidelines. Since neither organization has an adequate staff, the Ministry of Education will draft the actual bill. In this situation the politicians feel that they are in control and are using the bureaucracy to handle the technical details. They are confident that the product will be what they desire. The bureaucrats feel that their input into party policy is greater than party influence on their drafts. Each side appears satisfied with the relationship. If there is delusion, it is on the side of the bureaucracy, which feels that its autonomy and powers are properly its own and the result of its ability.
Discussion of the decision-making process within the bureaucracy itself needs several prefatory remarks. First, most decisions in the bureaucracy are concerned with carrying out laws already passed. The actual enforcement or implementation of the provisions is often handled by prefectural governments. For example, agricultural extension services, which in the United States would be handled by local offices of the federal government, are in Japan "delegated" by the Ministry of Agriculture and Forestry to the prefectures. This was the Japanese prewar practice, and it continued even after the Occupation reforms. Central government control over prefectural expenditures permits a very tight rein on the way in which the delegated functions will be carried out. Decisions regarding the interpretation of laws, for example, are referred back to the concerned ministry.
Second, the majority of matters in Japanese organizations, as elsewhere, are settled by the single decision (senketsu ) of the appropriate official or office. This is, after all, what bureaucracy is about: the division of a complex task into simpler parts and the assignment of specific functions or
jobs to specific offices. Most decisions occur within parameters already defined. They clearly fall within the jurisdiction of a single office, and neither infringe upon the authority nor offend the sensibilities of other offices. It would be silly to refer such decisions to complicated procedures. At most the matter will be passed to the official's superior for an automatic stamp of approval.
Third, both in business and government in Japan the decision-making process is fairly formalized. There are tables of organization and instructions saying what office shall deal with what kinds of matters. There are charts or lists saying how far up in the organization different matters must be taken for final approval. At times this will be indicated by checks in the appropriate space at the top of a document. At times regulations even spell out what kind of decision-making process shall handle what kind of matter.
Let us, however, consider a complex decision, the draft of a new law that has political ramifications and affects the work of other ministries. Once initiated from above, it may go through the following stages:
1. Drafting the bill—done in the section (ka ) that has responsibility for the matter. It will involve informal discussions within the section, and may involve querying other offices about what would be acceptable to them.
2. Consultation and meetings—informal talks and formal meetings to revise the draft and to gather support and approval for it.
3. Circulation—passing the completed document up and down through the concerned offices for seals of approval by the office chiefs until the draft reaches the office of the vice-minister. This may overlap the previous stage.
4. Submission—giving the document to the minister for consideration by the cabinet or submission to the Diet.
In drafting the bill, the main difference between the United States and Japan has already been referred to: in Japan it is usually done in the bureaucracy, in the United States it may be done in a Senate committee or in the White House. Yet even when an American bill is drafted in a department, there is a second difference: the American bill may well be drafted by the staff of a high-level official, whereas in Japan the vice-minister will give the job to the bureau chief concerned, who will pass it to the appropriate section where younger career officers will do the drafting. The difference in the two procedures reflects a difference in
organizational structure. Japanese bureaucracy is by and large a line organization. It is a vertical command structure of offices beneath offices beneath offices. It has few staff officials—that is to say, few officials who are attached laterally to high offices and who themselves have no subordinates.
Some coordination with other offices may take place even during the preparation of the original draft of a bill. If the measure involves two sections or two bureaus, the junior officials preparing the draft may sound out their opposites in the other concerned office. Most consultations with other offices, however, occur after the draft is completed and approved by the section chief. There is no predetermined order of consultation; this varies with the measure. Nor is it absolutely fixed which consultations will be formal and which informal. Informal consultations are sometimes called nemawashi . The primary reference of this term is to the preparations made in advance of transplanting a large tree: digging a trench around it, cutting the thick lateral roots, and bending the smaller roots circularly around the earth clump that will be moved. As applied to bureaucratic practice, it refers to the "spadework" involved in gathering together backing for a measure. The other form of consultation is the meeting (kaigi ). In preparing a measure for the Diet, the document may first be brought before the weekly meeting of section chiefs of the ministry. Next it may be cleared with the appropriate division of the LDP Policy Affairs Research Council. All drafts of laws must also be cleared by the legal bureau of the cabinet (Naikaku hoseikyoku[*] ), which checks the compatibility of the proposed law with existing laws. One official from each ministry serves in this bureau; officials consider this a good assignment. If the bill involves money, it must be approved by the Ministry of Finance; this requires another meeting. At some point the draft may be considered at a meeting of the vice-minister and bureau chiefs of the concerned ministry, or a meeting of the vice-ministers of all of the ministries.
If there is a difference between the process of consultation in Japan and that of the United States, it is one of emphasis. In the United States the tendency is to call a meeting of the concerned offices and thrash out any differences in the open. Face-to-face disagreements are not avoided. Open confrontation is the rule rather than the exception. This is not to say, of course, that a good deal of "buttonholing" (the American version of nemawashi ) will not precede the meeting. In Japan, on the other hand, the tendency is to settle differences beforehand through informal talks. This avoids open confrontation. It avoids a situation in which one man wins and another, who has openly revealed his position, is marked as a loser when the decision goes against him. Organizational solidarity will not tolerate procedures that create winners and losers. At times the building of a consensus requires compromises that actually affect the decision reached. At times the compromises are merely token gestures to placate someone who otherwise would be seen as a loser and make it possible for him to join
in a nominal consensus. In Japan as elsewhere there are many either-or situations. Consensus cannot miraculously do away with hard decisions. Whoever wins acceptance for his policy and gains the authority to implement the new policy is left in a strong position. In this respect Japan is not as different from other countries as some writers have suggested.
Because of the importance of informal discussions, and because open confrontation is usually avoided at meetings, the function of the meeting can be reduced to the formal approval of a settlement already reached during informal talks. In this connection Imai Kazuo tells the story of a Tokyo middle-school baseball team, which, each inning before taking up its position on the field, would huddle at the pitcher's mound, put their arms on each other's shoulders, and listen to words from their captain. A visiting team from the countryside was lost in admiration at this sophisticated custom and decided to imitate it. Before the last inning they formed a circle around the mound. But the captain of the team, having no strategic message to impart, merely said: "Let's all eat watermelon after the game." Imai continues: "I will probably be criticized for comparing the kaigi (meeting) in governmental offices with this watermelon kaigi . Yet such kaigi are not altogether lacking."
Meetings of bureau chiefs or section chiefs are held with such frequency that many may lack issues to discuss, or they may deal chiefly with matters of jurisdictions. The potential for a drift toward formalism in any routine procedure is always strong. Yet even Imai's criticism stopped at "not altogether lacking." I would stress, based on conversations with officials, the centrality of the meeting in the decision-making process. Discussions at meetings are often substantial. Drafts are revised and rerevised. At times an office opposed to a measure will openly denounce it at the start of a meeting as a tactic to force others to compromise—since to override his objection would make him a loser. (Of course, such a tactic is used infrequently. Potential conflict situations are usually resolved beforehand.)
Nakane Chie has written that Japan is a land of interminable meetings, dragged out in the name of democracy—which in Japan really means harmony. This may be true of faculty meetings in Japanese universities where ideological differences make informal agreements difficult. It is also true of Diet sessions where face-to-face confrontation is institutionalized and the opposition can use the value of harmony against the "tyranny of the majority." But it does not characterize meetings within the bureaucracy where differences are concerned with means, not ends.
There is also a difference between Japan and the United States in regard to stage three, the circulation of documents. In the United States the decision taken at the meeting, or after a series of consultations and
meetings, is final. All that remains is to inform other concerned persons of the outcome. But in Japan, though agreement may be reached at the meeting, the final formal approval occurs when the document is passed from office to office and stamped with the seals of the responsible officials. Some writings have gone so far as to argue that this paper-passing process (the ringi system) is the decision-making process in Japan. The reason for this undue emphasis on one part of the total process is that, while informal consultation is hard to see and meetings so ordinary that they are hardly worth mentioning, the ringi process is highly visible and peculiarly Japanese. It is also because, for unimportant matters , the draft may be circulated for approval without prior consultation or meetings. But for significant matters, the primary function of the ringi system is to circulate information about decisions already taken. As such, it strongly resembles H. A. Simon's "referral and clearance system."
Viewing then the entire process of decision-making, and bearing in mind that reality is more variable than the paradigm offered above, one can say that the functions that are handled by the "meeting" in the United States are in Japan distributed over the informal consultation, the formal meeting, and to a small extent the ringi system. These are differences of emphasis arising from differences in bureaucratic organization and social behavior, but overall the process is less dissimilar than it is usually made out to be.
Strengths and Weaknesses in the Decision-Making Process
The Japanese pattern of line organization has one obvious advantage over the American line-staff pattern: young officials are given important work and vital experience almost from the time they enter the ministry. In contrast, the American college graduate who has just entered the bureaucracy may have to wait ten or fifteen years before he is promoted to a level where meaningful work is done. Japanese officials take for granted the correctness of their procedures. When queried, senior officials reply that the young are energetic and innovative while older officials have the wisdom needed to tone down the final product. This attitude is not new in Japan. In On Serving One's Lord (Jikun teiko[*] ) written in the 1730s, Kani Yosai[*] , discussing the division of labor between lower and upper officials, argued that "rough drafts (aragoshirae ) should be made by lower officials and then polished by higher officials." Ishii Shiro[*] commented that this is what is meant today by giving young officials "something to live for" (ikigai o ataeru ).
The exposé literature on Japanese bureaucracy, however, often views the same phenomenon in a much less favorable light. It points out the undue influence of young or lower officials on policy decisions as one of the major dysfunctions of the system. Such an influence is termed "politics by subordinate officials" (zokuryo[*] seiji or zokkan seiji ). In an extreme instance, even the word used to describe the overthrow of lords by their vassals (gekokujo[*] ) in feudal times has been applied to it. As evidence of this phenomenon, two kinds of examples are cited.
The first is the influence exercised by subordinate officers on the decisions that led to the Pacific War. In approaching this question one should note first that the sections concerned—such as the Operations Sections of the Army General Staff, the Military Affairs Section of the Army Ministry, the First Section of the Naval Affairs Bureau—were the key sections in the services. They contained the elite of the service elites, men comparable in every way (except breadth of vision) with the higher bureaucracy of the nonservice ministries. It was their job to draft policy and strategy for the services; they did not usurp this function. Second, the "subordinate officers" were not that young. Lieutenants and captains in the sections were young, but the majors and colonels who served as section chiefs were in their middle or late thirties. Third, many of these men had been military attachés in Germany and favored a strong pro-German policy. This operated as an ideological factor setting them off to some extent from the senior officers. This degree of ideological difference is unusual in Japanese bureaucracy. Even in these anomalous circumstances the middle-level officers could make their influence felt only because the generals and admirals themselves were divided on questions of policy, and because of a political situation in which strategic decisions displaced political decisions as generals and admirals replaced political leaders in the cabinet.
A recent visitor to the United States who had been a junior officer (not a section chief) in the Japanese Supreme Command from 1939 to 1945 was asked whether he had encountered the phenomenon of the "inferior overpowering the superior." He appeared not to understand the question. The next day he was asked who drafted the plans for the General Staff, and he replied that it was done by the younger officers. He was then asked whether the generals always agreed with the plans. He replied that sometimes there were difficulties, but he was unwilling to use the label of gekokujo . He described a process of testing, discussion, and compromise, with the superiors capable at any one point, if not at all points, of having their own way against the proposals of their junior staff. He also stated that disagreements were the exception and not the rule.
In short, the kind of influence that "juniors" had during the late thirties came from line organization (even the General Staff had a kind of line organization) in which policy was drafted in the section. But this type of organization could have the baleful consequences it had only because of a
combination of exceptional circumstances. And even then, the influence of juniors should not be overestimated.
A second kind of example cited to illustrate the power of lower officials often centers on the figure of the assistant section chief (kacho[*] hosa ). This official may be a careerist on his way up, but is more likely to be a clerk who has not passed the higher examination. He may have a fairly long tenure in the post while careerist section chiefs come and go. Masuda Yoneji describes an incident which occurred during his years in the Ministry of Labor:
After two or three years as a section head I gradually became accustomed to the life of an official and learned the mores of the office. So I began, according to my own lights, to make small changes on documents to which I had previously given a blind seal. At this the administrative assistant came in bearing the sets of ledgers pertaining to drafts of documents, overtime, etc., and said: "Section chief. From now on please handle all of these yourself. I can no longer bear the responsibility for handling the papers of the section." With these words he piled up a mountainous stack of ledgers on my desk. I was dumbfounded by this sudden coup d'état on the part of this man on whom I had so relied. "Now, now there, don't say that. Won't you please take care of them," I replied, making a total, unconditional surrender. Afterwards I again fell into the pattern of putting a blind seal on whatever documents he gave me. With that his loyalty to me became even stronger than it had been before.
Masuda had earlier described how his assistant covered up for him when he was absent from the office on a late social lunch, protecting him from the anger of the bureau chief. Masuda also described his assistant, an older, prewar type of official, as "sitting upright in his chair" and "running the various affairs of the office with the authority and dignity of an elder (karo[*] )." Masuda continued:
Of course what must be taken into consideration is that from this time I became unable to examine carefully all of the documents that came through the office, which was my primary responsibility in the statistical investigation section. I came to understand from my later experience that this sort of maneuver was, for good or bad, a special characteristic of the lower officials (zokkan ).
Another example of the same phenomenon was the case of "Emperor So-and-so," a permanent lower official in MITI, who was said to have the power to block a request, even when the minister favored it.
I would not deny the existence of the kind of subordinate power that these examples illustrate. But I would argue that it is office power, not policy-planning power. It is the kind of power held in the United States by
certain master sergeants on army bases, by certain lower officials in government offices, or by long-term secretaries in university department offices. It is based on a strategic position in the organization and a technical mastery of official forms and the petty details of administrative routine that higher officials do not want to be bothered with. When such a person retires, higher officials are momentarily pleased at the prospect of regaining control of the nether reaches of their own organization, and then they immediately set about finding the same type of person as a replacement.
Thus my conclusions are as follows. First, there is nothing uniquely Japanese about office power and not too much can be made of it. Second, young career officials in Japan do have a special kind of influence. Only a handful of such men are admitted to a given ministry each year. The key sections in a ministry are few in number. From the time they enter, they are apprentice policy-makers, and the system intends that they function as such. They draft bills. There is a saying often quoted by Japanese officials that "the original draft is in a 70 percent position of strength" (gen'an wa shichi bu no tsuyomi ). This is an index of their influence. But this is far from saying that Japanese bureaucracy is run from below. If one asks junior officials whether they dictate policy, they laugh. The opposite contention, that superiors are sometimes tyrannical and that juniors show a slavish deference toward them (jidai konjo[*] ) is also heard. Ex-officials who served in the prewar years are particularly fond of describing office martinets—almost as if they were mourning the passing of the type: the section chief who would return a draft without saying what was wrong with it until his underlings produced one that met with his approval, the bureau chief so fearful that his subordinates wet their pants and came down sick when called on the carpet before him, or the section chief who made small meaningless changes in a draft so as not to incur the displeasure of a bureau chief known to dislike an automatic seal of approval.
A second major criticism of Japanese decision-making in the exposé literature is that the ringi system has several built-in weaknesses. First, the flow of documents through offices is so great that office chiefs must blindly
put their seals on papers that they have not read and do not know the contents of. Second, the time required for the papers to pass across the desks of the concerned office chiefs is so great and the potential capacity of any official to sabotage or critically delay the decision by letting the document sit on his desk is such that the system is slow, clumsy, and inefficient. Third, since a measure is drafted at one level, approved at another, and signed at all levels in between, the locus of responsibility is vague.
No one disagrees with the charge that the volume of paper flowing through offices is excessive. Imai writes that as the head of a small local government office he once affixed his seal eight thousand times in a single day, that this was the record for the year, though he was not trying to set a record, and that it took all of his energies to keep on hitting the right spot. Judging from the writings of ex-bureaucrats, there is even a kind of mystique built up above the seal. One official bragged that "a person's character is revealed in a single stamp of the seal" (hanko hitotsu ni mo jinkaku ga deru ). Another official who forgot his seal two days running was scolded by his chief: "The seal of an official is like the rifle of a soldier. Is there a soldier who would go to the battlefield two days in a row without his rifle." On the other hand, most officials I have talked to say that the problem of the "blind seal" is exaggerated. A great volume of paper flows over the average desk. Most of it gets a blind seal. Sometimes an assistant does the actual stamping. Mistakes do occur. But important papers are picked out and read.
Regarding the problem of delays, the Japanese literature stresses the capacity of an official, who was not invited to the meeting where a draft was approved or who feels that the authority of his office has been slighted, to pigeonhole a document during the circulation (ringi ) process. Such an official can hold up (nigiri komu ) the draft bill by saying, "let me research it a bit" or "let me think about it some more," and when pressed can reply, "just now I'm very busy" or "a little more time." Imai compares the affixing of the seal to the procedure at a customs barrier or the authority to issue a visa: the greater the number of barriers controlled, "the greater the opportunities to inflict maliciously one's power on (ijiwaru ) others." My impression, however, is that the slowness of Japanese decision-making (if it is slower than in other countries) arises from the need for a measure of consensus in the process of consultation and meetings rather than from passive resistance during the circulation of the document. If an important matter has been resolved, if it has had a settlement (matome ) at each level
up the hierarchy, it is extremely difficult to block. The necessary seals can be obtained by orders from above, by energizing the personal clique, or the responsible official can hand-carry the document around from desk to desk, in each case bowing and waiting for the official to affix his seal. Few officials can hold out under such pressure. Even Imai suggests that on occasions an obstinate official can be "bowled over with adulation" (ogami taosareta ).
The problem of responsibility or the lack of it in Japanese bureaucracy is more complex. Only a portion of the problem is involved with the ringi system. Imai writes that no one talks about responsibility as much as the bureaucrat. It is a favorite word, yet what he really means by it is the power of his office, not his duty. Certainly in Japan the value of work does not lie solely in the work itself. Rather, work validates one's membership in the work group, work justifies office solidarity. Since any bureaucracy is hierarchical, responsibility is heaviest at the top. But in Japan the tendency to vest all responsibility in the head of the organization is carried to an extreme that appears ridiculous in Western eyes (and in some Japanese eyes as well). If a train crashes and lives are lost, be it sabotage or the negligence of a switchman, the director of the national railways may offer his resignation. When Ambassador Reischauer was stabbed, the director-general of Public Safety offered to resign, though this was an attempt at what the Japanese term an "instant assassination" for which the director general had not the faintest responsibility by Western standards. In part, this notion of responsibility was influenced by German legal concepts adopted during the Meiji period, according to which total responsibility was vested in each minister. But it also reflects the fact that organizational solidarity in Japan is symbolized by loyalty to its head. To justify this loyalty and maintain solidarity, the head assumes responsibility for incidents highly visible to the outside society.
The same sweeping responsibility was accepted by Tanaka Kakuei when he was appointed to head the Ministry of Finance. His words to the assembled bureaucrats of that ministry were: "You are the elite of the elite. No one can match your intelligence. Accordingly I will leave the thinking to you. And I, Kakuei, am ready to bear full responsibility for the consequences of your thought." One of the Meiji leaders used almost exactly the same words when he took over a ministry during the 1870s. Tanaka's speech was calculated to elicit loyalty and hard work. Ex-officials often criticize the don't-rock-the-boat (kotonakare shugi ) mentality of Japanese bureaucracy. Tanaka was telling his ministry that no one would be punished for new initiatives and creativity. Perhaps he was also telling them that, though not a graduate-bureaucrat himself, he knew how to handle bureaucrats.
Within the ministry the same solidarity is reflected in the diffuseness or collective nature of responsibility. In the exposé literature the problem is viewed as a consequence of the separation of work and authority. The lower official feels only a limited responsibility since he is merely submitting a draft. Higher officials feel only a nominal responsibility since they receive a completed document already bearing a number of seals of "approval."
I do not disagree with the description, but it needs several qualifications. First, this problem is not unknown elsewhere; the United States, too, has the proverbial official who never signed what he wrote, or wrote what he signed. Japanese line organization merely increases the magnitude of the problem. Second, though some officials assert that responsibility is vague and collective responsibility is no responsibility, others protest that responsibility is not so vague. They contend that whoever may prepare the draft, it is the section chief who bears the primary responsibility and his bureau chief who takes a share of it. Seals by other offices only peripherally concerned with the matter mean the document has been seen and not objected to. Third, to the extent that responsibility is collective, it rests to that extent on the consensus formed during consultations and meetings. The final formal document with its collection of seals may symbolize the consensus, but it is subsequent to it. As long as consensus is seen as necessary, even doing away with the circulation of documents would not produce a different kind of decision-making.
It is not easy to evaluate the performance of a bureaucracy. In the case of a private company, the profits from the sale of its product provide a yardstick by which to measure the efficiency of its parts. But government bureaucracy has no production schedules, no sales, and no profits, and it is difficult even to define its product. Japan's postwar goal was economic growth. The bureaucracy effectively translated this goal into policies highly supportive toward business. And perhaps just as important for growth was that the bureaucracy interfered very little in the decentralized decision-making of private companies. Imai writes that officials know little of the real world and for them to draw up laws is "like a tailor making a suit without taking measurements." The combination of supportive policies and noninterference created a maximal environment for growth. But a by-product of the policy was instances of chemical poisoning without a parallel in the world.
It is difficult, too, to compare one bureaucracy with another for they vary in their organizations, functions, and positions in their polities. It requires a formidable exercise of imagination to envision a Japanese
Henry Kissinger usurping the policy-making functions of the Foreign Ministry. Japanese diplomats smile and dismiss the possibility. Yet the powers and the insulated, self-contained nature of the ministries in Japan, which Japanese officials take for granted, may have more to do with the Japanese pattern of one-party government than with the legal position of the bureaucracy or with its intrinsic quality. If Japan's parliamentary system continues in good health, and if parties or coalitions of parties should begin to alternate in power, then the present bureaucracy could change quite suddenly. A two-platoon system could develop within the top ranks of the central ministries, or the parties could develop within their organizations the equivalent of White House staffs as a countervailing force against the know-how of the ministries. The embryos of such staffs already exist. If such changes occurred, the bureaucracy might be much less efficient since it would no longer be carrying out policies that it had a hand in drafting. In any case, it is clear that much of the autonomy of the existing bureaucracy—which present-day Japanese officials see as an eternal verity—is in fact precariously dependent on political factors external to the bureaucracy itself.
Turning from the external situation to the internal workings of the bureaucracy, I would argue for a mixed analysis of the formal system and the informal patterns found in the larger society. The solidarity of the office, for example, forms almost spontaneously in response to the psychological need to belong to a warm, interdependent social group. It is a need that exists prior to the bureaucracy. The office group resembles the solidarity of nonbureaucratic groups in Japan. It arises wholly apart from the official purposes of the office organization. The particular character of vertical ties among Japanese bureaucrats can also be explained in terms of patterns of human relationships learned before they became officials. Yet once brought into the office, these general social proclivities—which can assume a variety of forms—are molded onto the formal structure and are adapted to serve the official ends of the organization. The personal clique becomes a vertical action group. The office community becomes a work team. The energies of the informal system are thus harnessed to the service of the official system.
Harnessing such energies, however, does not mean that they have been wholly converted into a positive force. The favoritism and discrimination associated with the personal clique remain dysfunctional. The office community uses the jurisdictional powers it is given by the official system to reinforce its natural animosities toward outgroups, producing frictions that interfere with the work of the organization as a whole.
This suggests that all bureaucracies are necessarily imperfect since the requirements of perfection are mutually contradictory. If vertical communication is easy, then horizontal communication is likely to be difficult. The ease of vertical relationships in Japan, in contrast to France or India, is a plus factor; yet it is just this ease that nurtures the personal ties that
lead to the formation of cliques. To eliminate cliques would require a change in the nature of personal ties, which would doubtless lead to a new set of dysfunctions. Solidarity is good, but poor cooperation between offices is not. Rules are necessary if the workings of an office are to be rational and predictable, yet to the extent an office is bound by rules there is the opposite danger of formalism. Men of ability are necessary for good government, yet if men of great talents are recruited, elitism is hard to avoid.
I do not mean to imply that dysfunctions should be welcomed. Some dysfunctions such as corruption have an entirely negative input. In many countries the dysfunctions of bureaucracy are so severe that the tasks set by political leaders are not accomplished. But I would suggest that particular dysfunctions should be judged in the larger context of the end results produced by the bureaucracy. If the bureaucracy gets the job done, then some entropy in the system can be tolerated. Japanese bureaucracy is not the model of efficiency that some who talk of Japan, Incorporated, would have, nor is it the neutral body pursuing national interests that the bureaucrats themselves often describe. But neither is it the jumble of dysfunctions portrayed in the writings of its critics. Japanese officials work long hours when necessary; in terms of any comparative standard they are honest; and they accomplish most of the tasks set for them with a reasonable competence.
Big Business and Political Influence
Gerald L. Curtis
Notwithstanding the lack of careful empirical studies of decision-making in Japan, a widely shared notion of the structure of power in Japanese society has taken strong hold. At the most vulgar level it is expressed as "Japan, Incorporated." At a somewhat, but not very much, more sophisticated level it is manifested in the thesis that Japan is run by a triumvirate of business, the bureaucracy, and the Liberal Democratic Party (LDP); that "organized business, the party government, and the administrative bureaucracy are the three legs of the tripod on which the Japanese political system rests. . . . The spectacle of Japanese politics is in
a sense a dramatic production, presented jointly by the business community, the ruling party, and the administrative bureaucracy."
Any study of business influence on government and politics raises extremely difficult conceptual and methodological problems. It involves examination of widely held assumptions about the structure of power in Japanese society. It raises questions about "elitist" and "pluralist" approaches to politics that are at the heart of much of the controversy in political science. It becomes intertwined with problems of defining and distinguishing between such concepts as influence and power, unwieldy concepts to use with any kind of consistency and precision.
This paper does not attempt to develop any general theory of business-government interaction in Japan or to draw any definitive conclusions about big-business influence in Japanese politics. Our knowledge of Japanese governmental decision-making is too fragmentary to allow for such generalizations at this stage. Indeed, it has been the penchant of some observers for drawing overly broad generalizations that has created so many inappropriate stereotypes of Japanese practices.
This paper deals with just a few selected aspects of business-government relations. Career mobility, the informal interaction between leading businessmen and government officials, and the operations of Keidanren (the Federation of Economic Organization) and the other major economic organizations have been pointed to by many writers as accounting for what makes business-government interaction in Japan supposedly unique.
To say that the conservative party in Japan tries to serve the interests of businessmen is not to say anything that is not true of conservative parties in the United States and other capitalist economies. The attention that has focused on the business-government relationship in Japan, however, has involved questions of the mechanisms available to the big business community for the exercise of influence as well as questions of the degree to which the political system is responsive to big business interests.
To raise such questions is to reveal their extreme complexity. How does one measure influence? How does one trace the source of particular policies? What kinds of standards can be established that would allow for truly comparative analysis? Some mechanisms for exercising influence that are crucial in one country may be unimportant in another. In the United States, for instance, an extremely high rate of career mobility from business to government—in both elective and appointive offices—provides an important mechanism for facilitating business influence on government. In Japan, such mobility is virtually nonexistent. On the other hand, business organizations such as the National Association of Manufacturers or the Chamber of Commerce of the United States are relatively weak interest-group structures compared to their counterparts in Europe and
Japan. Although it is usually assumed that government-business interaction is more intimate and the political influence of business is greater in Japan than in the United States, it would be extremely difficult to make a comparative study that could demonstrate that position. Depending on the criteria employed, it might be easier to make a convincing argument that big business's political influence is greater in the United States than in Japan—at least under the Nixon administration.
The problems of analyzing business influence in Japanese politics are complicated by the fact that much of the writing on the subject contains comparisons, implicit or explicit, with American business-government relations that are terribly distorted. There is a tendency to assume that the United States is still the country of the individual entrepreneur and strong antitrust policies and that the speed and direction of economic development is dependent on the unimpeded play of market forces. American businessmen in particular talk of "Japan, Incorporated" in comparison with an American economic system that may have existed in the time of their fathers or grandfathers, but hardly exists today. If one looks at the late-twentieth-century Japanese economy from the perspective of the late-nineteenth-century American one, the degree of government-business interaction seems great indeed.
There is no question that the Ministry of International Trade and Industry (MITI) has had, in the past, an intimate relationship with Japanese business. It is also true that the history of Japanese government encouragement of capitalism in the Meiji period has had a continuing effect on the style of business-government interaction. But even the most ardent supporters of a theory of a cohesive ruling elite in Japan are forced to qualify their statements when faced with empirical evidence of Japanese practices.
The United States Department of Commerce study on government-business relations in Japan is a good example. The author of the volume concludes that "there is a special style and scope to interaction between government and business in Japan which makes it distinctive"; that "'Japan Incorporated' is an Economic Fact of Life." Close to half the volume, however, is devoted to a series of commissioned case studies. Based on these studies, the author was forced to so qualify the meaning of "Japan, Incorporated" as to render it largely meaningless. The author admits that the studies demonstrate that advance planning is neither as long range nor as far reaching as had been thought; that interaction between Keidanren and MITI varies considerably from case to case and suggests no single pattern; that industry operates on its own initiative and
without governmental intervention to a greater extent than had been assumed; and that there is often such considerable conflict between ministries in the bureaucracy, that "Japanese ministries often appear to operate a great deal more independently of the Prime Minister and each other than would be the case in this country." Finally, the author concludes that on the basis of the empirical evidence available: "The government cannot effectively interpose its judgments on the corporate structure. It can encourage but not dictate mergers or formal combinations. MITI has therefore sought, generally with little success , to stimulate consolidation through its exercise of a variety of levers on industry."
The main problem with much of the non-Marxist theory regarding a Japanese power elite is that it has attempted to attribute to Japanese culture as a whole behavior that is the consequence of a particular combination of factors in a unique historical period. Marxist theory—as skeptical as one may be of its rooting in empirical fact—is nonetheless strong as theory since it places Japan in a universal and comparative context: Japan is ruled by a particular power elite because it has a capitalist economy. Non-Marxist defenders of a power-elite theory of Japanese politics make comparative analysis impossible: Japan is ruled by a power elite because of the unique characteristics of its people's psychology and of its social institutions.
There is often a time lag between reality and generally shared perceptions of that reality. In postwar Japan, the gap between image and reality is particularly serious because of the extremely rapid pace of change. Generalizations about the role of Japan's economic organizations that would have been accurate ten years ago, for instance, are inaccurate today. Data from the 1950s on the occupational backgrounds of Diet members gives a picture of career mobility from business to government that has little relevance to the Japan of the 1970s. The substance of the relationship between business and government in the postwar period has been the consequence of particular economic, social, and political conditions. As these conditions change so does the nature of that relationship.
Thus, this paper challenges some of the more widely accepted assumptions of how certain mechanisms facilitate business-government interaction in Japan. Such an exercise is desirable for purposes both of refuting an inaccurate stereotype of "Japan, Incoporated" and stimulating new research into questions of the structure of political power in present day Japan.
The Myth of Zaikai Omnipotence
Zaikai , in literal translation, means the financial world, but it also means
something much broader, and at the same time more specific. Although writers have had difficulty arriving at a generally agreed upon definition for it, the zaikai has been credited by many with unparalleled powers over Japanese politics.
In his acceptance speech after defeating Kono Ichiro in the 1965 LDP presidential election, former Prime Minister Sato Eisaku made a famous slip of the tongue. He started out by saying: "On this occasion zaikai 's . . . ," then stopped and rephrased it: "On this occasion the people's support . . . " To many people, "zaikai 's power over the conservative party," as one group of Japanese commentators put it, "is absolute." "In fact, Japan's politics and economy cannot move even one step if the wishes of zaikai are ignored. To put it another way, if zaikai decides it wants something, it can get practically anything." In the view of Chitoshi Yanaga, "zaikai 's power of life and death over governments has been dramatically demonstrated time and again. Candidacy for the premiership is unthinkable without its tacit approval, and the prime minister's days are numbered if his policies or methods no longer meet with its approval."
All of this suggests rather awesome power for zaikai . But Yanaga goes on to say that zaikai is really not a coherent group: "Zaikai , however, is by no means a monolithic structure. . . . The diversity of attitudes, motives, and interests that characterize zaikai has made the cooperation of the larger key organizations (Keidanren; Nikkeiren—Japanese Federation of Employers' Association; Keizai Doyukai—Japanese Committee for Economic Development; and Nissho—Japanese Chamber of Commerce and Industry) indispensable in achieving consensus and in presenting a united front on issues and problems."
The United States Department of Commerce study of business-government relations in Japan makes a similar point about the role of these key organizations in harmonizing zaikai views. Unfortunately, it adds to the confusion by mistakenly referring to zaikai as a discrete group like the Industrial Problems Research Council (Sanken—the Sangyo[*] Mondai Kenyukai[*] ):
In their fairly frequent informal discussion meetings Sanken and zaikai focus on the major issues confronting Japanese society, as well as Japan's economy. The many different points of view, motives, and interests of these business leaders tend to be harmonized within the councils of the Keidanren and the other major federations. . . . Moreover, the harmonization process, besides providing a national consensus for big business, helps Sanken and zaikai members transcend the narrower interests of the corporations, banks, and organizations with which they are affiliated for a more national perspective on these issues.
As these quotations suggest, the meaning of zaikai is shrouded in considerable conceptual confusion. Part of the reason for the confusion is that the term has a number of meanings in Japanese. Although literally it means the financial world, it sometimes refers to the entire economic community or businessmen generally, as when people talk of zaikai, seikai (political world), or gakkai (academic world). But zaikai , as commonly used, refers to something more specific than the entire business community. According to one author, it refers to the relatively small number of leaders of the business world who "hold the line of communication to the political world"; in the words of another, to those business leaders who "engage in and control economic activities for the benefit of the capitalist system and political activities to maintain the present political structure. . . . "  The term is sometimes used to refer to individuals and at other times to the place where these individuals meet. Suzuki Yukio has suggested that zaikai is the place where business leaders function as a power elite.
Translating zaikai as the business elite or the business world's power elite does not quite convey the Japanese flavor of the term. Other countries have business elites but only Japan has zaikai . At the base of the distinction seems to be the fact that the men who make up this elite in Japan spend an extraordinary amount of time in so-called zaikai activities (zaikai katsudo[*] )—activities that are not directly related to their own companies, but which seek to represent the interests of the business community as a whole.
Zaikai , as the term is commonly used, might be defined as the group of major industrial and financial leaders who spend a significant portion of their time in activities that relate to the economy in general and the society at large, generally through active participation in one or more of the four major economic organizations.
Not all leaders of large industry are considered zaikai members (zaikaijin ). Many of the leaders of firms affiliated with the former zaibatsu are not active in zaikai and most of the postwar self-made men—like Matsushita, Honda and Idemitsu—are considered outside the zaikai . On the other hand, some of the leading zaikai members are not leaders of major industries. Uemura Kogoro, for instance, the president of Keidanren and the man referred to as the "prime minister of zaikai " is not even a businessman, but a former bureaucrat who has been with Keidanren since the founding of the organization.
Virtually all those generally regarded as zaikai members are elderly men who have been in top leadership positions for almost the entire postwar period. The average age of the vice-presidents of Keidanren, for instance, is seventy-three, and President Uemara is seventy-nine. The zaikai can be characterized as the business community's group of elder statesmen, a group of extremely capable business managers that has led Japan through reconstruction and high economic growth and has dominated her major economic organizations. When people talk of big business's influence in Japanese politics, they are largely talking of the influence of zaikai , the elder statesmen who seek to represent the interests of the business community vis-à-vis the government, the public, and in the international arena.
It is one thing to argue that zaikai has been a potent force in Japanese politics. It is another to argue, as so many do, that zaikai has "life and death" powers over the government. Such a position ignores those occasions when zaikai has been unable to have its way. Instances of zaikai 's inability to control the LDP presidential election, for instance, are as evident as instances where zaikai has allegedly manipulated the election. Zaikai was unsuccessful in forcing Hatoyama's resignation before he normalized relations with the Soviet Union; was unable to bring about a Kishi victory over Ishibashi upon Hatoyama's retirement; could not prevent Sato from running against Ikeda when Ikeda ran for a third term; and most recently was unable to prevent Tanaka from winning
over Fukuda in the 1972 LDP presidential race. Zaikai has been influential in LDP politics, but this influence has varied with time and issue.
Tanaka's success in the LDP presidential election represents a particularly strong challenge to the thesis of zaikai omnipotence. Tanaka won the election in spite of big business, and not because of it. Even if, by election day, many zaikai members supported Tanaka, or more commonly, adopted an attitude of "equal distance" (tokyori[*] ) from Tanaka and Fukuda, this was because they had realized the futility of continued support for Fukuda and not because they had changed their minds about whom they would like to see succeed Prime Minister Sato.
Nonetheless, believers in zaikai omnipotence cling to the notion that zaikai was responsible for Tanaka's victory, or at least, that it could have prevented the victory if it had been determined to do so. Some writers, despite considerable evidence to the contrary, argue that the zaikai met several months before the election and decided to shift its support from Fukuda to Tanaka. Another commonly heard view was that zaikai had conceived and brought about the alliance between the Tanaka and Ohira[*] factions. In this way zaikai was able to use "reliable" former-bureaucrat and Ikeda-disciple Ohira to keep "unpredictable" Tanaka in line. Similarly, it was zaikai that "dispatched" LDP-member Ishida Bakuei to join the Miki Takeo faction as Miki's "chief of staff" to restrain Miki from continuing his alleged one-sided position on the China-normalization question. Finally, since "the more than ten billion yen in hard cash that flew around [the LDP presidential election] all came from zaikai , now it is the turn for the new government to receive its 'bill' from zaikai ." All of
this makes interesting reading but is more in the realm of fantasy than political analysis.
Among the advantages of the power-elite approach to the study of politics is that no amount of evidence can disprove the theory that an elite rules, and that even the lack of evidence can be used to support the theory. Evidence contradicting the model is dismissed either as related to issues with which the business elite is not really concerned, or as further proof of big-business skill in concealing its infamous role—further substantiation that big business, indeed, is the invisible hand manipulating politicians and politics.
One of the most salient features of contemporary Japanese politics is the limited lateral entry of businessmen into elective politics and appointive government office. This has been particularly true in recent years, but has been the clear trend since the unification of the conservative parties in 1955. It is crucial to distinguish between patterns prevalent in the pre-party-merger period and those that have since prevailed. Unfortunately, this distinction is often not made, and some recent publications have continued to present the erroneous view that big business is represented in considerable numbers in the Diet and in the government. One recent study, based on data mainly from 1953 and 1954, maintains that "nearly one-third of the Japanese House of Representatives is made up of businessmen and former businessmen" and that "big business is formally represented in the government by Cabinet Ministers of its choice." Using more recent data, we discover that businessmen account for no more than 15 percent of lower-house members in the LDP. Businessmen rank only third in representation in the LDP Diet delegation, well behind former bureaucrats, who comprise about 30 percent of the Diet delegation, and professional politicians, who account for 24 percent.
Furthermore, it is important to distinguish in the case of Japan between "nationally" oriented and "locality" oriented politicians. The business-
men who make up 15 percent of the LDP Diet contingent include representatives of big businesses and owners of small countryside stores. If a distinction is made between the nationally oriented representatives of big business and the locality oriented small businessmen, the number of zaikai representatives in politics becomes considerably smaller.
The lack of significant career mobility from business to politics is reflected also in the career backgrounds of the men who have become Japan's postwar prime ministers. No prime minister in postwar Japan comes with a career background in big business. Yoshida Shigeru was a former Foreign Ministry official; Hatoyama Ichiro was a prewar politician; Ishibashi Tanzan was a journalist; Kishi Nobusuke, Ikeda Hayato, and Sato Eisaku all were former bureaucrats. Tanaka Kakuei is typed in the Japanese classification scheme as a professional politician because of his more than twenty-five years in the Diet. Nonetheless, he is the first postwar prime minister to be independently wealthy, having amassed a personal fortune in the construction industry. He is not, however, from the nationally oriented big business establishment. The only such businessman to make a serious attempt at becoming prime minister has been Fujiyama Aiichiro, former president of the Japan Chamber of Commerce and Industry. Fujiyama was notably unsuccessful in his effort.
No LDP faction leader comes from a career in big business. A group of younger Diet members led by Kosaka Tokusaburo, himself a second-term member, is probably the only factionlike group in the LDP led by someone clearly from a zaikai background. Kosaka was president of the Shin'etsu Chemical Company and an active member of Nikkeiren, the Japan Federation of Employers' Associations.
If we look at the cabinet, businessmen do appear somewhat stronger in one regard. A prerequisite for appointment to the cabinet, as a rule, is success in five or six Diet elections. However, there are fewer cabinet posts than there are Diet members with the requisite seniority. An analysis of cabinet appointments shows that, within the group with equivalent seniority, former bureaucrats have the best chance for appointment, businessmen are second, and professional politicians rank third. This means that where businessmen are successful in being elected to the Diet, they are successful in eventually getting into the cabinet. But the number is small to begin with.
Under the Japanese constitution, the prime minister is required to appoint a majority of cabinet ministers from among members of the Diet. Since there are twenty-one people in the cabinet, the prime minister could appoint as many as ten people from the business world if he so wished. In fact, however, the prime minister almost never goes outside the Diet for his ministers. Again, Fujiyama Aiichiro is the only exception since the formation of the LDP in 1955. In 1957 Prime Minister Kishi appointed Fujiyama as foreign minister. It was after his appointment that Fujiyama ran for and was elected to the Diet. The dynamics of factional politics
within the LDP leave little room for the appointment of outsiders to these coveted cabinet posts.
A similar pattern prevails in the recruitment of businessmen into other appointive government positions. Here again there is a marked difference between the pre- and post-party-merger periods. Before the party merger, businessmen were often appointed ambassadors, for instance, to undertake specific missions for the government. This trend reached its height in the fifties when numerous businessmen were recruited by the government to negotiate reparation agreements with Southeast Asian countries. Businessmen were also sent abroad in considerable numbers on official economic missions. Such practices have diminished in more recent years. Furthermore, unlike the United States, every regular ambassadorial appointment is made from among career foreign ministry officials. There is no system of rewarding the large financial contributor to the LDP with an ambassadorship. In fact, virtually all posts in the bureaucracy, except for those of the cabinet ministers themselves, are filled by persons recruited from within the career service. This is a very different situation from that prevailing in the United States where political appointments often reach down several levels in the bureaucratic hierarchy.
Businessmen appointed to other governmental positions are also notable for being small in number. Commentators often point to Usami Makoto, former president of the Mitsubishi Bank, who served as president of the Bank of Japan from 1964 to 1969. But Usami is the exception that proves the rule. His successor, Sasaki Tadashi, reestablishes the more common pattern: he was a career bureaucrat in the Bank of Japan.
Business participation on governmental advisory commissions does not represent career mobility in the strict sense, but can be considered under this rubric of business-in-government broadly defined. Each ministry as well as the prime minister's office has numerous advisory commissions (shingikai ). The system was first introduced during the American Occupation and became so popular that at one point there were over 250 of these commissions in operation. Since 1960, the government has been making an effort to cut down on their number, but the advisory commission has now become an integral part of the governmental structure. In 1971 important leaders of the business community served on a variety of government committees including the Consultative Committee on Foreign Ministry Personnel, the Economic Consultative Council attached to the prime minister's office, the Finance Ministry's Consultative Council on Finance, and the Education Ministry's Central Consultative Council on Education.
There is no question but that such commissions can provide a
mechanism for the exercise of influence. But it is important not to exaggerate their importance. For one thing they are for the most part consultative, not decision-making or administrative organs. Second, businessmen share membership on them with scholars and other groups and thus are not in a position simply to manipulate them at will. Third, selection of commission members is made by the relevant ministry. As a result, there may be as much difference of opinion among the businessmen on the commission as between business and other commission members. Moreover, those businessmen whose views appear most congenial to the bureaucrats responsible for deciding commission membership are those likely to be selected. Finally, there are no simple answers to the question of how advisory commissions affect public policy. In some cases influence is probably very great; in others minimal. There are some instances where the advisory commissions help push government policy in new directions; it is more likely, however, that in many cases, advisory commissions probably provide the government an opportunity to co-opt support for policies that the bureaucracy has already determined.
Career mobility between government and business in Japan is a one-way street. The only significant movement is from government into business, a pattern Japanese refer to as amakudari . Such a pattern is also prevalent in Western countries, but there are elements to the Japanese case that are particularly notable.
Because of the early retirement characteristic of most Japanese ministries, bureaucratic entry into business takes place at a relatively young age. Furthermore, bureaucrats as a rule enter businesses that have close working relations with their ministry. Thus, finance ministry bureaucrats tend to go to banks and other financial institutions, MITI officials to large industry, construction ministry officials to construction companies. Legally, bureaucrats are prohibited for two years after retirement from going to work for a firm with which they have had official dealings within the five years preceding retirement. But this rule has little practical impact. A company looks for a retiring bureaucrat who has the right personal connections within the appropriate ministries, although this need not be someone with whom the firm has had personal dealings.
Dramatic examples of amakudari abound. In the steel industry, for example, the Nippon Steel Company lists three former vice-ministers of MITI among its executives, Kawasaki Steel has a former vice-minister of the Economic Planning Agency, and Kobe Steel has another former high
official from MITI. The Tokyo, Kansai, and Hokkaido Electric and Power Companies each has a former MITI vice-minister on its executive board. The presidents of four of the fourteen city banks are former Finance Ministry officials.
Undoubtedly, amakudari plays a role in facilitating business-government communication, if not coordination. But here too the situation is not free of ambiguity. For one thing, some of the recruitment of bureaucrats into private business is not due to business initiative. Early retirement, particularly in the economic ministries, and poor retirement benefits, leave men in their early fifties with many productive years ahead of them and without employment. Ministries have increasingly sought to prevail upon industry to hire such bureaucrats; thus, helping retiring bureaucrats find jobs is often viewed as a moral obligation, if not a legal one. Furthermore, finding a job in industry for a bureaucrat is a way to reduce the number of people competing for promotion as the channel of advancement narrows sharply at the upper reaches of the bureaucratic hierarchy. In short, some degree of career mobility from government to business is the consequence not of business-government collusion or of business efforts to penetrate governmental decision-making structures, but of the internal dynamics of the Japanese bureaucratic system.
Bureaucrats are not always hired by business primarily because of their governmental connections. Often they are hired for their technical skills. Accordingly, entry into business does not in itself demonstrate anything conclusive about a former bureaucrat's role in a particular business firm.
Despite these qualifying remarks, the consequences for business-government relations of the bureaucrat-turned-businessman pattern is an important subject, which deserves further study. I would only suggest that, until the evidence is in, one resist the temptation to draw easy conclusions.
On the other hand, insofar as patterns of businessmen's participation in electoral politics and in government is concerned, I would hope that the preceding discussion has made it clear that business-in-government is a comparatively insignificant mechanism for facilitating business influence over government. Advisory commissions surely do provide opportunities for businessmen to have access to important information, to develop close personal contacts with important bureaucrats, and at least to be a part of the input structure in the decision-making process. In terms of affecting the decision-making process itself, however, such commission participation is no equal to the career mobility from business to government in the United States. Influence in this context is no substitute for power.
Informal Elite Coordination
Important in power elite theory, particularly as developed by C. Wright Mills, is the assumption that informal, social ties among elite groups reinforce a common value consensus, provide opportunities for arriving at
policy agreements, and account for the ease with which certain groups can walk through the corridors of power. When this elitist approach is applied to Japan, the result is a picture of an intimate, conflict-free family of politicians, bureaucrats, and businessmen working together to steer the course of government policies. Geisha houses in Akasaka and Shimbashi become the power centers where an elite meets over sake to determine Japan's future. School and marriage ties become the glue that holds members of the ruling class together. Particular cultural traits become the key for explaining why informal communication is so particularly significant in Japan.
Informal contact between top political and business leaders obviously plays a part in structuring business-government communication, but available evidence does not suggest that informal elite coordination is as crucial a mechanism for enabling business to exercise a major political role as many writers contend.
A comparative perspective is necessary in one basic regard. American observers who express surprise at the degree of informal contact between business and the political leadership are reflecting not so much the exotic nature of Japanese social intercourse as the uniqueness of the American geographical dispersion of elite groups. The fact that, unlike Washington, Tokyo is the center for almost everything is basic to understanding why there is such apparent elite contact in Japan. Similar patterns probably exist in London or Paris. Indeed, the importance of physical proximity is reflected in the increasing involvement of Osaka businessmen in Tokyo zaikai activities. Osaka businessmen have traditionally stayed aloof from the Tokyo business establishment and government. This attitude has been breaking down in recent years for a number of reasons, one of which is simply the development of the "bullet" trains. The increase in Osaka business involvement in Keidanren, on governmental advisory boards, and in the informal groups that meet with the political leadership seems directly related to improvements in the transportation system.
Some observers place great emphasis on the importance of school and marriage ties in binding together Japan's alleged power elite. While the importance Japanese attach to school ties is obvious, their impact on political life is not easily determined and their integrating role should not be oversimplified. Many classmates are political enemies and not all businessmen and politicians who graduated from the same class at Todai become bosom friends. The following kind of exaggeration is anything but helpful to an understanding of how school loyalties get translated into political behavior: "At the peak of his [a well-known businessman named Kato Takeo] career, he was the elder statesman and oyabun of all Keio University graduates, many of whom occupied powerful positions in business and finance."
The study of keibatsu (marriage ties) is very popular in Japan; one can easily find a genealogy chart on virtually every businessman and politician. But modern Japan has not had a strong tradition of a closed ruling class. Nepotism is of minor importance. Almost all executives of large corporations are salaried employees, not business owners, with no ability to pass on their businesses to their offspring. In politics, "second generation" Diet members, the sons of deceased or retired politicians, are often successful in the election immediately following the death of the incumbent and unsuccessful in staying in office beyond that. All the efforts supposedly being made to knit Japan's ruling elite together are somewhat in vain if the progeny of the alliances cannot inherit positions of power. Finally, the fact that people are third cousins does not necessarily say anything about their political behavior. Sato Eisaku and Miki Takeo are relatives, but one would have a difficult time explaining why that is politically important.
Although there is a tendency, in my view, to exaggerate the uniqueness and intensity of informal business-government contact in Japan, it is clear that Japan does have some unique mechanisms for facilitating informal elite contacts. Most conspicuous are the clubs of the prime minister and other top political leaders where they join with business leaders on a regular basis for informal discussion.
Since these clubs generally have meetings that are private and off the record (and usually held in the exotic setting of an Akasaka geisha house), they allow the observer to engage the full potential of his imagination in deciding what goes on at them. Some participants suggest that they are important in ensuring that the political leadership does not do anything "rash" against big-business interests. Others imply that they have a more positive function in building a consensus on important issues and in coordinating public statements of business and political leaders. Still others suggest that they have only minor importance. The observer need only choose his informants carefully to substantiate his preconceptions.
There is some evidence that helps put the role of these clubs in perspective. Most important is the trend for the clubs to become institutionalized. This was particularly true during Sato's long tenure. Clubs were once truly informal groupings of politicians and close business supporters. Today they are organizations. To be a member of one of the prime minister's clubs is to be recognized as a member of the establishment. The easy informality and intimacy that previously characterized relations between Japan's political and business leadership has gradually given way to a more formal kind of relationship. As informality has declined, the old clubs have become more structured, less intimate, and larger institutions.
The Ikeda era represented the culmination of an era of intimate personal ties between business and political leaders that dates from the time of the Yoshida administration. Ikeda was made Yoshida's finance
minister while still a first-term member of the Diet. He was recommended for that post by Miyajima Seijiro, former president of the Japan Industrial Club and Yoshida's closest business associate. This Yoshida-Miyajima relationship was mirrored years later by the close personal relationship between Ikeda and the group of businessmen called the Kobachu[*] group because it was led by Kobayashi Ataru (Chu[*] ), former president of the Japan Development Bank and a close colleague of Miyajima. Members in this group included, among others, Sakurada Takeshi of Nisshinbo, Nagano Shigeo of Fuji (now Nippon) Steel, the late Mizuno Shigeo of Sankei Shinbun , Imazato Hiroki of Nihon Seiko[*] , and Shikanai Nobutaka of Fuji Television. Two characteristics of this group are particularly important. First, its members were (and several still are) active leaders in Nikkeiren and Keizai Doyukai and not in Keidanren. Second, they are not, with the exception of Nagano, representatives of "big" business. During the Ikeda period this group, particularly Kobayashi, Nagano, Mizuno, and Sakurada (who were referred to as the "zaikai four emperors"), was an active political force, channeling political funds to the LDP and maintaining the most intimate contact with the political leadership.
Sato's long tenure broke down these personal ties and reduced the importance of the clubs that had been established to bring the prime minister and the business leaders together. For one thing, Sato's personal style was quite different from Ikeda's. Business leaders commonly contrast Ikeda's outgoing, informal, argumentative approach with Sato's officious, bureaucratic, noncommittal style. Whether it made any difference in policy or not is an open question, but businessmen at least felt that with Ikeda they had an opportunity to fully discuss issues and bring him around to their view. With Sato they could never be sure their view was understood or what Sato's position was.
Furthermore, Sato made a concerted effort to expand his business ties beyond the relatively small group of business leaders that had been close to Ikeda. Sato set up an unprecedented number of clubs to expand his contacts. This led one contemporary observer to remark that the "Sato administration is in danger of opening up too many separate, multiple routes to the business community, and without any structure or order it runs the danger of losing its close zaikai ties." This is precisely what did happen and is part of the reason for Sato's long tenure and zaikai 's declining influence. Imazato Hiroki remarked at the beginning of the Sato period: "Our era has for all practical purposes ended with the establishment of the Sato regime." This view was echoed after Sato left the prime ministership by Nagano Shigeo in his remark: "The Sato era was different from the Ikeda era. The so-called zaikai four emperors didn't exist under Sato."
If the close personal ties between political and business leaders were eroded during the Sato administration, they probably will be weakened even further during the Tanaka administration. Tanaka does, of course, have close relations with many business leaders. During the years he served as secretary general of the LDP, he was responsible for the Party's fund raising, and during the periods he served as finance minister and MITI minister, he was in constant and close contact with the business leadership. Shortly before his election as prime minister, the Getsuyokai[*] (the Monday Club) was established to bring Tanaka together with business leaders for periodic discussions. But Tanaka has not had intimate personal ties with Japan's leading businessmen, and he has not had to depend on them for his own political funds. He has not given as much attention as many other LDP leaders to building his zaikai ties. He has been more solicitous than any former prime minister of the newly wealthy businessmen outside the business establishment that zaikai represents. Tanaka's personal style suggests a further decline in the importance of the prime minister's clubs as a mechanism for facilitating informal elite coordination.
Leaving aside the weakening personal ties, there is something essentially fanciful in the view that informal clubs play an important decision-making role, or more generally, that informal elite coordination is a crucially important feature of Japanese politics. Most decisions in complex societies, after all, are bureaucratic decisions and are handled through formal bureaucratic institutions. To assume that political and business leaders informally make decisions on issues is to deny the bureaucratization and complexity of the decision-making process. Furthermore, issues that are so controversial as to require a top-level political decision also are likely to arouse the active interest of numerous groups in the society. That clubs and other informal contacts give business leadership an opportunity to express views directly to the top political leadership is important, but when the political leadership has to make a decision, it has to take into consideration many other pressures besides those coming from big business.
In realistic terms, the prime minister's clubs are important to the extent that they give business leaders an access to the prime minister that is not available to other groups. But the degree to which such access has practical consequences for policy depends on such other factors as the issue involved, the degree of unanimity or dissension within the business leadership on that issue, and the strength of other forces in the society. There is no simple equation between access and influence. Demands can be communicated to the political leadership in a variety of ways. A
private dinner party is one; a massive strike by organized labor is another.
In addition to all that has been said here, big business's access to the prime minister is not as great as is often assumed. It is, of course, impossible to get complete and accurate information on top-level informal interaction between big business and the prime minister. Meetings can be held in secret, understandings can be reached over the telephone, agreements can be made on the golf course. Nonetheless, the evidence available on the prime minister's activities does not suggest as intimate a relationship as is generally assumed.
The Asahi Shinbun publishes a column every morning describing the prime minister's schedule for the preceding day. While the reporters surely miss some things, they do a credible job of accounting for almost all the prime minister's time from early morning until his return home in the evening. An analysis of Prime Minister Sato's schedule as reported in the Asahi for a one-year period from July 1, 1971 to June 30, 1972, presents an interesting picture. The overwhelming proportion of his working day throughout this year was spent with top LDP politicians including his cabinet ministers. The second most time-consuming activity involved meetings with foreign dignitaries. This left little time for the business leadership, and almost all of that was at club meetings. Sato met with a zaikai group called the Itsukakai (Fifth Day of the Month Club) once a month except for one month when there was no meeting. He met with the Choeikai[*] , another grouping of Tokyo's business leadership, six times, and with a group of Osaka-based businessmen in a club called the Kitchokai[*] nine times. He also met nine times with the Sansuikai, the members of which included former Prime Minister Kishi and Kishi's close associates in the business community, and had four meetings with the Kamomekai, a club of shipping industry leaders. There were five meetings with another zaikai group called the Akebonokai. In short, the prime minister met with different leaders of the business community according to a regular pattern of monthly or bimonthly meetings. There was only one group of businessmen that got to see him more than once a month. This was the Tsukiichikai, a group of businessmen from Yamaguchi prefecture where Sato is elected to the Diet. Sato is reported to have met with this group twenty-three times in twelve months. The privileged access of this group to the prime minister suggests that he may have been giving more attention to looking after his constituency than to seeking the advice of big businessmen on running the nation's affairs.
In addition to these group meetings there were nine meetings during the year with the leaders of the four economic organizations. No more than
twenty additional meetings with businessmen were reported in the Asahi accounts for the entire period.
This public schedule, of course, is not complete, but it probably does give an accurate indication of the prime minister's division of time in a general sense. To assume that the prime minister spends a great deal of time with leaders of big business is to be unrealistic about his responsibilities. Almost all of his time is spent as president of his party in dealing with political issues, as head of his cabinet in dealing with governmental issues, and as head of state in dealing with matters of foreign relations. The schedule confirms that big business gets regular, institutionalized access to the prime minister. It does not support the view that the business leadership is intimately involved in the process of government.
Political Funds and Political Influence[fn40]Political Funds and Political Influence
One of the most striking features of the LDP is the extent of its dependence on big business contributions for its financial support and the degree to which the sources and amount of that support are hidden from public view. In a society that traditionally has been relatively free of corruption, it is noteworthy the extent to which extensive illegal financing of the political activities of politicians and political parties has become an integral part of the political system. But revelations in the seventies about corruption in the financing of American election campaigns should be a reminder that this is a universal and not a particularly Japanese problem. This point is important because writings on political funding in Japan tend to reflect the tendency of many Japanese to judge their own political behavior against extremely high standards of supposed "democratic" behavior, and thereby, to paint a particularly critical picture.
There is no doubt that money can buy political influence in Japan as it does elsewhere. But lest one succumb to the temptation of drawing overly broad conclusions about the extent to which political funding is the source of political influence for the Japanese big business community, mention should be made of a few factors that serve to inhibit the exercise of such influence.
First of all, the lack of a moderate opposition party with the potential for taking over power serves to weaken the credibility of any business threat to withhold funds from the LDP. It is often argued that the creation of a second moderate political party is necessary if Japan is to develop a "mature" democratic system. But ironically the development of a strong nonideological opposition party may serve to increase big business's political influence by making credible a threat to withdraw financial support from the LDP if certain polities are not adopted.
Second, the financing of individual Diet-candidate campaigns on the local level is only indirectly provided by the big business community. LDP candidates tend to depend on local support and the backing of their faction leader. The latter is dependent on business contributions, but the ties between the business establishment and the LDP backbenchers is indirect.
Furthermore, a characteristic of political funding in present day Japan is the new role being played by wealthy businessmen who are not part of the big business establishment. Men who have made fortunes in recent years in real estate, construction and land development today comprise a powerful political force. They are not active in Keidanren or accepted as part of the big business community but many of them have intimate ties with LDP politicians and appear to be the source of a great deal of "under the table" money that allegedly passes hands between businessmen and politicians. One can hypothesize that the increasing importance of this group in funding LDP politicians, combined with a dramatic increase in the costs involved in professional political life, are resulting in an increase in political corruption. Such a development does not, however, strengthen the influence of the big business establishment over the LDP.
In the case of big business' political contributions, there is an apparent trend away from efforts to coordinate business contributions and an increase in the development of ties between individual factions and particular business conglomerates. Rather than reinforcing an image of Japan, Incorporated such a trend threatens to revive in a new form a prewar funding pattern in which conservative political parties (instead of the large party factions today) received support from different large business enterprises.
The issue of political financing is complex and I would only suggest that a serious study of this question needs to take account of the factors mentioned above. Also to be meaningful, any analysis of business influence over the LDP needs to have a comparative perspective. Does big business exert more political influence through political contributions in Japan than it does in the United States or in France for example? One cannot, I believe, answer that question by arguing that the big business community coordinates its funding or maximizes its influence over the LDP through the machinations of the zaikai or through some other unique mechanism.
The Organization of Big-Business Interests
There are organizations in the United States—the Chamber of Commerce of the United States and the National Association of Manufacturers—that are comparable in name to Japan's major economic federations, but they
do not perform the same functions. Japan's economic organizations are more comparable to several European organizations. They have historically provided an important mechanism for the representation of Japanese business interests and an organizational focus for zaikai activities.
The historical development of economic organizations in Japan is similar to that in Western countries. By the end of the nineteenth century all of these countries had established Chambers of Commerce. With the First World War, each established a specifically industrialist organization, and after the war there was a general restructuring of economic organizations in Japan, Germany, Italy, and France.
One difference between Japan and European countries is that Japan was some twenty years behind Europe in the development of an organization of businessmen to deal specifically with labor problems. Another difference is that there traditionally has been, and still is, a rather clear separation between Japanese economic organizations that represent big business and those that represent small and medium-sized enterprises. This is in part a reflection of the dual structure of the Japanese economy, and is in contrast to the situation in many European countries where economic organizations represent all industry. A further difference is that whereas European economic organizations have strong and active local branches, the most powerful economic organizations in Japan have little or no organization on the local level.
Government sponsorship of capitalism in the Meiji period was mirrored in the history of the development of Japan's first economic organizations. The first Japanese businessmen's organization, the Chamber of Commerce, was formed at government request and with government financial assistance; it was given legal status and served as a government advisory council. This history is not as unique as it may seem; in Germany and other continental European states, early Chambers of Commerce served to some extent as semigovernmental organs. In the United States, even though the Chambers were originally local, purely private organizations of businessmen, the creation of the nationwide Chamber of Commerce was
promoted largely by President Taft, and invitations to the first meeting of the CCUS went out with President Taft's signature. Furthermore, although the Japan Chamber of Commerce was founded with considerable government intervention, the Japan Industrial Club in 1917 and the Economic Federation in 1923 were founded on the initiative of the business community without government participation. Government involvement in the establishment of the Chamber of Commerce was important, however, because it did set a pattern for Japanese economic organizations to serve an advisory role to government. That pattern was adopted by later organizations and established itself in the activities of postwar organizations as well.
The history of development of economic organizations in Japan is first of all a history of the inability, despite the effort, to create one comprehensive economic organization. In a rather ironic comment on the view that the Japanese economic community is a united force, the authors of Keidanren's history of economic organizations in Japan asked in dismay, "Is the constant cycle of splintering and reunification and splintering again the inescapable fate of Japan's economic organizations?" Indeed, the history of these organizations is the history of a constant shifting of power from one organization to another and the creation of several, somewhat competitive, so-called comprehensive organizations. There is no organization that represents the business community; there are several organizations that represent different elements within it.
A second factor in the history is the formation of a separate organization to handle labor problems. The first such organization was Zensanren (Zenkoku sangyo[*] dantai rengokai[*] ), founded in 1931. Its present-day successor is Nikkeiren. Keidanren does not deal with labor problems.
A third important factor in the historical development of Japan's economic organizations is that the postwar reorganization of prewar institutions was undertaken in a period when the country was in a state of physical collapse, economic chaos, and a social revolution being guided by an alien occupation force. The structure and the purposes of the newly created economic organizations were profoundly influenced by and were in response to a unique and temporary situation. Japan's postwar economic organizations have had to adapt to, or be rendered irrelevant by, the dramatic changes that have affected Japan's society and economy in the quarter century that has passed since their creation.
The organizations Japanese refer to as the keizai yon dantai , the four organizations of the economic community, are Keidanren, Nikkeiren, Keizai Doyukai and Nissho (the national Chamber of Commerce and Industry of Japan). These organizations comprise the major institutions for the representation of Japanese business interests. Among them, Keidanren is the most powerful and prestigious.
Keidanren was originally founded as a comprehensive economic organization with a mandate—largely at the insistence of the American Occupation—to pay special attention to the interests of small- and medium-sized enterprises. However, by 1952 Keidanren had become a spokesman for big business interests, and the constituent organizations representing small business, led by Fujiyama Aiichiro[*] , bolted the organization. Since that time, Keidanren has developed an impressive organizational structure to serve the interests of its membership of 110 industrial, commercial, and financial associations and 739 leading corporations encompassing virtually all the major businesses in the country.
Keidanren strives to mobilize consensus within the business community and influence the government to adopt policies that are responsive to industry's wishes. To accomplish this, it has established an elaborate structure of committees to examine questions of concern to the business community and has created a number of mechanisms for ensuring that business views get fully represented to government.
Keidanren's thirty-seven committees cover the entire span of economic issues, both domestic and foreign, and are chaired by leading businessmen. The committee staffs stay in constant contact with lower- and middle-level bureaucrats in relevant government ministries. In the case of Keidanren, this means primarily MITI. There is constant communication, exchange of documents, and meetings between Keidanren staff members and MITI bureaucrats. There are also regular meetings of Keidanren's leadership with top-level bureaucrats and cabinet ministers. Between August 1971 and May 1972, for instance, there were twenty meetings with top-level bureaucrats: four from the Finance Ministry (MOF), five from MITI, four from the Foreign Ministry, two from the Self-Defense Agency, one from the Construction Ministry, three from the Justice Ministry, and one from the Agriculture Ministry. Between July 1971 and May 1972, there were fifteen meetings with cabinet ministers: three with the prime minister, four with the finance minister, three with the MITI minister, two with the head of the Self-Defense Agency, one with the head of the Science and Technology Agency, one with the minister of transportation, and one with the construction minister. Between August and December 1971, there were also seven meetings with LDP party leaders which dealt exclusively with discussions of the tax sections in the draft of the following year's annual budget. There were no meetings with LDP leaders recorded in the schedule for the period from January to July of 1972.
Most of Keidanren's activities relate to economic issues of direct and immediate concern to the business community. The representations it makes to the government are concerned almost exclusively with concrete economic issues such as tax rates, international monetary policy, and liberalization policy.
Keidanren regularly issues various proposals, "requests," and "demands" to the government. Since 1954, as indicated in the accompanying table, Keidanren has issued about twenty such resolutions a year. Changes in emphasis over the years reflect both changes in the economy and in Keidanren's organization. The absence of resolutions on labor policy or reconstruction after 1950, for example, reflects the division of responsibility between Keidanren and Nikkeiren from that time and the boon to Japanese industry brought about by the Korean War. The fact that resolutions concerning liberalization did not appear until 1959, and those concerning pollution until 1965, mirror patterns of postwar economic development in Japan. Needless to say, the fact that there were as many resolutions concerning the international monetary system in 1971 as there were in all the years up to 1967 is a fitting comment on the big-business community's concerns in the early 1970s.
The categories most often represented in the resolutions give an idea of the kinds of issues about which consensus within Keidanren is most successfully achieved. There are six categories in which Keidanren has issued more than thirty resolutions in its history (leaving aside the miscellaneous category). One of these categories is the economy in general, which refers mainly to such matters as forecasts concerning economic growth and the rate of inflation. Another is finance, which includes comments on government fiscal policies and the opinions Keidanren submits to the minister of finance each year on the new government budget. The Confederation of British Industries and other comparable European economic organizations also engage in the latter practice vis-à-vis their governments. The other well-represented categories relate to taxation, foreign trade, energy resources, and defense production. The largest number of defense-related resolutions in 1953 was in response to the establishment of the defense agency and the new emphasis on domestic weapons production.
At several points in the postwar period, Keidanren has joined together with other economic organizations to issue joint resolutions intended to bring the full influence of a united business community to bear on the government and political parties on essentially noneconomic issues. Among the resolutions listed in the miscellaneous category are eight that deal with political issues, six of which were issued jointly by the four economic organizations. However, seven of these either preceded or came at the time of the conservative party merger and were calls on the political leadership to establish political stability. The eighth was issued during the security treaty crisis in June 1960 and was a call for the protection of parliamentary democracy and the re-establishment of international trust.
The four organizations have joined together on other occasions as well to try to influence the course of political developments. The most famous incident perhaps was the demand by the four organizations' leaders in September 1956 that Prime Minister Hatoyama resign before going to the Soviet Union to sign the normalization agreement. Hatoyama did not take their advice.
The most recent example of a zaikai effort occurred one day after Tanaka became prime minister. On July 6, Kikawada, Uemura, Nagano, Sakurada, Doko, and Imazato called on Tanaka and presented a "request" (yobosho[*] ) of five articles. The five articles called for the establishment of a political posture that would regain the people's faith, the establishment of strong political leadership, recognition and acceptance of Japan's international responsibilities, and creation of national solidarity. The fifth article called for a strong party structure. This meant overcoming factionalism and the deep split in the party caused by the Tanaka-Fukuda fight for the party presidency. "All efforts should be expended to discard small differences and in union improve the party and overcome the crisis" is the group's explanation of the meaning of the five articles. As Nagano put it, "We are hoping for dynamic politics based on party unanimity."
Such a representation by the leaders of the business community has no parallel in American society. For the business leadership to make demands on the political posture of the new prime minister, even before he had completed the formation of his cabinet, surely seems excessive, at least to an outside observer. But the meaning of the representation in terms of the exercise of political influence is not easy to discern. Obviously, if zaikai had been as powerful as sometimes alleged, Mr. Tanaka would not have
become prime minister and the representation would not have been made in the first place.
The evidence available suggests a number of things about the operation of Keidanren. First of all, Keidanren is an organization concerned with economic matters of general interest to the business community. It is much more vital a meeting ground for Japanese business than is either the National Association of Manufacturers or the Chamber of Commerce for American businessmen. But in its organization and activities it is not unlike economic organizations in Europe. What distinguishes Keidanren from these European organizations is not the nature of its activities but the thoroughness with which it engages in them. Committee meetings involving the leaders of big business, study groups, lectures, speeches by government officials, meetings of trade and industrial associations, parties for visiting dignitaries, and the like occur on a daily basis.
Second, Keidanren's power as a consensus-mobilizing mechanism is exercised within a relatively limited issue area. It is able to mobilize a consensus of the entire business community, to "harmonize" the views of business leaders on the relatively small number of issues that do not involve conflicts within the business community itself. Keidanren has no magic formula for mobilizing a community consensus on issues about which the business community disagrees. Furthermore, the number of resolutions that Keidanren is able to generate each year conveys an exaggerated sense of consensus. Many of its resolutions are the product of such broad compromise that they emerge at a level of generality that largely undercuts their possible influence on government policy.
It is also true that consensus within Keidanren does not necessarily represent consensus within the big-business community. In discussing Keizai Doyukai's role, Keidanren's president Uemura remarked: "Sometimes they cause us trouble because after we go through the painstaking task of building a consensus, Doyukai leadership makes a pronouncement that reflects a different position and succeeds only in confusing the issue. Sometimes I wish they would think a little more carefully about what they say."
Keidanren is an important source of funds for the LDP. It assesses each constituent trade or industrial association a defined amount for transmission to the Kokumin Kyokai[*] (National Association), an organization established to channel funds to the LDP. But Keidanren does not raise funds for individual factions or individual politicians. Businessmen use political contributions as a source of political influence, but they do so in direct association with LDP members. Keidanren does not provide a mechanism for the exercise of such influence.
Keidanren's structure and activities allow businessmen an opportunity to discuss issues with other businessmen as well as with government
officials and to gain access to information they might not otherwise have. But Keidanren's role as a pressure group in Japan's political system seems to be overestimated. For a variety of reasons Keidanren and the other economic organizations seem to be playing a decreasing interest- or pressure-group role.
Several factors account for this decline. Before 1955 the political party system was unstable, and there were no set patterns for recruitment of political leadership. In this period businessmen were most directly active in politics. Since 1955, clear patterns of political recruitment have been created, established parties have become increasingly institutionalized, patterns of bureaucratic recruitment and advancement are clearly defined, and businessmen have increasingly been excluded from leading political and governmental positions. Policy-making has become increasingly complex and bureaucratized, and this has reduced the opportunities for businessmen, acting through organizations such as Keidanren, to significantly affect the policy-making process.
Viewed from the business side, the growth of the economy and the new strength of Japanese enterprises make Japanese industry much less dependent on organizations such as Keidanren than they were in earlier years. One of the central reasons for creating Keidanren was to gain influence for business interests by combining the strength of over a thousand individual industries which had been weakened by the general economic collapse and the policies of the Occupation authorities. As industry regained its strength, the need to rely on Keidanren to champion industry's cause declined. With economic reconstruction, business became less dependent on government assistance. If anything, many businesses now are more concerned with guarding their independence from encroachments by MITI than seeking government support.
This trend has been strengthened by the gradual reconcentration of Japanese industry. Although the regrouped combines are not structured along the lines of the prewar zaibatsu , they are, like their namesakes, capable of protecting their own interests without reliance on Keidanren. Mitsubishi, Mitsui, Sumitomo, Fuji, and other conglomerates do not need Keidanren to the degree that any one element of these groups needed it in 1948. The large conglomerates have their own channels to government and political leaders, provide political funds to LDP politicians, and have their own research staffs. All of this lessens the importance of Keidanren in the total picture of business-government interaction.
With the expansion and the internationalization of the economy, the business community itself has become increasingly pluralistic. There are conflicts of interest within the big-business community that neither Keidanren nor any other organization can effectively mediate. Differences of opinion on the issue of voluntary export controls on textiles and on the rapid liberalization of the computer industry are just two recent examples of the kinds of issues that are increasingly dividing the business commu-
nity. The consequences on the ability of Keidanren to perform a consensus-mobilizing function are obvious.
Furthermore, the increasing liberalization of the economy, with the consequent rise in foreign investment in Japan, coupled with the rise of a new group of Japanese business leaders have greatly disturbed the social cohesiveness of the Japanese business establishment. Keidanren, for example, has not only moved toward involving leaders of business traditionally considered outside the establishment (such as the automobile industry) in its highest executive positions, but has also begun to open its doors to membership by foreign-owned enterprises in Japan. All of this contributes to further breaking down the "club" atmosphere that had dominated Japan's economic organizations.
This trend is reinforced by the routinization of the mechanisms of business-government interaction themselves. Speeches by cabinet ministers at Keidanren are institutionalized; "informal" clubs bringing together political and business leaders are formalized; and much of what in an earlier age may have been a mechanism for exerting significant influence has now become ritual.
The clublike atmosphere at Keidanren and the intimate personal relationships between business and government leaders have also been affected by a number of developments in regard to the personalities active in zaikai . First, some of the most important personalities, commanding enormous respect within the business community and the deepest confidence of the political leadership—such as Miyajima Seijiro, Mizuno Shigeo, Kobayashi Ataru, and Ishizaka Taizo—have either retired or died. Similarly, the men with whom they were closest in the political world, namely Yoshida, Ikeda, and Sato, have also left the center of the stage.
Second, the men who control the leadership positions in the economic organizations and make up the so-called zaikai are almost all elderly and in positions of leadership virtually since the forming of these organizations a quarter of a century ago. There is a question whether their position today reflects their influence within the community and vis-à-vis the government, or whether their continued domination is little more than the phenomenon of a firmly entrenched and not particularly representative oligarchy. Several of the leading personalities in the business leadership are not active executives of their companies but devote practically all their time to zaikai activities.
Partly due to the domination of leadership positions by this group, many of the executives who are beginning to take over the top positions in Japanese industry have neither the personal ties with the political leadership nor command the respect within the business community of the present leadership group. Neither do they have the close ties among themselves that the older group has.
The editor-in-chief of the Nikkei Shinbun once remarked to me that
"zaikai died with Ikeda," and that, ironically, it was a casualty of the success of the high economic growth policy.Zaikai , as an institution, seems to be destined to a fate similar to that of the genro[*] in Meiji Japan—unable to survive the first generation in any meaningful sense. The conditions that gave rise to zaikai and lent it authority have been largely erased. The renewed strength of Japanese business, the pluralism within the business community, the internationalization of the economy, the emergence of a new, less cohesive generation of business and political leaders, and other factors suggest that while attempts to perpetuate it are likely, zaikai as a dynamic integrating institution in Japan's business community is unlikely to survive the generation of men who created it. This decline of zaikai in turn is likely to further encourage the trend toward pluralism presently evident.
The creation and development of the Industrial Problems Research Council perhaps can be best understood as a response by the business elite to these developments. The council was formed to be the new consensus-mobilizing mechanism, the "zaikai policy board" as the newspapers like to term it, the new structure for mediating intracommunity disputes and effectively representing business interests to the outside. It was founded in 1966 at the initiative of the head of the Keizai Doyukai, Kikawada Kazutaka, and gradually expanded in size from an original membership of seven to a membership today of twenty-three men representing the largest and most powerful of Japanese industry and finance. It was founded partly to serve as an advisory group to Kikawada after he had been appointed chairman of the prime minister's economic advisory council. However, the main motivation for its founding apparently was the desire to have a small group of leading executives come together to discuss ways to deal with the challenges being created for Japanese industry by the increasing liberalization of the economy. One achievement of Sanken was to play a role in fostering the merger of the Fuji and Yahata steel companies.
Sanken has been regarded as Japan's "most prestigious business policy group" and characterized as a "power above government." It has in fact been rather ineffective. It relies on the staff of Keizai Doyukai and is limited in its activities. Its monthly luncheon meetings are usually attended, according to newspaper reporters, by less than half the membership. It is still regarded in some quarters as "Kikawada's group," and it was partly to overcome that impression and the impression that Sanken was intended to weaken Keidanren by usurping its consensus mobilizing function that the membership was increased.
Sanken, in my view, emerged as an attempt by the business leadership to compensate for the inability of any other existing institution to mobilize and represent a community consensus. Since this inability is not due to the particular organizational structure of Keidanren, but is a consequence of developments in Japan's economic, social and political structures, I would hazard to guess that Sanken is destined to be unsuccessful in performing any major coordinating function.
Many business leaders still talk of the need for kanmin kyocho[*] (government-business harmony) and for chosei[*] (best translated in this context perhaps as government-business coordination). But one gets the feeling that the more zaikai leaders talk in these terms, the more they are reflecting the breakdown of postwar patterns of organization and interaction.
The Future of Japan's Economic Organizations
Any organization that exists over a considerable period of time faces the challenge of adapting to a changed environment. Keidanren, Keizai Doyukai, and Nikkeiren were founded over a quarter of a century ago in response to conditions that no longer exist. Keidanren was to mobilize the strength of a weakened and fractionalized Japanese business community; Keizai Doyukai was to give young executives an organizational base for contemplating the long-term reconstruction of the economy and the building of a "revised" capitalist system; "fighting" Nikkeiren was to coordinate management's efforts in battling a politically oriented labor movement. Today each of these organizations is in search of a new role.
It often happens, of course, that organizations do not adapt but either go out of existence or become increasingly irrelevant. It is sometimes suggested, for instance, that there is little to justify Nikkeiren's continued independent existence, that it should be disbanded and have its relevant functions absorbed by Keidanren. Uemura himself has suggested that this would be a sensible development, but an unlikely one. Persons long involved in an organization develop a loyalty that need have little to do with the organization's functions. Employment for considerable numbers of people and impressive titles and honor for the organization's leadership combine to create vested interests in the organization's continued existence. Nikkeiren, as is true for the other organizations, is determined to find a new role—one, in this case, that will enable it to respond to the criticism that it is in fact nothing more than "the labor committee of Keidanren."
The present is a transitional period for these organizations, but the directions in which they are moving seem clear. Keidanren, perhaps most importantly, has had rapid growth in its international operations. It has a
skilled professional staff in its international economic affairs department and has greatly expanded its activities as liaison between Japanese and foreign business groups and in helping organize large-scale Japanese investment programs in Iran, Brazil, and elsewhere around the globe. It either conducts or sponsors businessmen's conferences with virtually all European countries, the United States, Canada, and Australia. It has committees on relations with Southeast Asian countries and increasingly with Latin America. In 1970 it established a committee on cooperation with Africa.
Its leaders are spending increasing amounts of time abroad. In a one-year period from October 1970, President Uemura made five overseas trips. Significantly, three of them were to the United States. He visited the United States in October 1970 to discuss the textile issue; led an economic mission to Iran in April 1971; went to Washington for the Eighth Annual U.S.-Japan Businessmen's Conference in June; returned to the United States in September to attend the dedication of the new Japan House in New York, to which Keidanren makes a substantial annual contribution; and then led a delegation to the European common market countries in October.
Keidanren has also expanded its research on pollution, oceanography, and other such questions that can be effectively researched by a comprehensive economic organization. These new directions also, of course, reflect broader changes in the society. As pollution control, consumer protection, and energy resources have become more central issues of concern in Japan, Keidanren has moved quickly to establish new staff sections and new committees to help formulate business positions for dealing with them.
Keidanren has been moving away from trying to represent a unified business community on specific issues and has been putting a greater emphasis on considering broad questions of the long-range future of the Japanese economy. This trend, as well as the element of competitiveness that marks the relationship between Keidanren and Keizai Doyukai, were reflected in Doyukai president Kikawada's remark: "Keidanren's role as a petitioner for business is declining . . . and it is moving in the direction of thinking of the total economic structure rather than solely of the benefits for its member firms. It's improving."
Many long-time domestic observers of Keidanren agree with these observations of Keidanren's changing role. But foreign observers, who have only recently discovered Keidanren, tend to see it as a remarkably cohesive power center of Japanese business, a view that is more appropriate to the Keidanren of the late 1950s. This time lag in perception has
created misconceptions in many a foreign businessman's mind of the organizational unity of the Japanese business community and the ability of a small leadership group to rally a consensus on any particular issue. Depending on the issue, it has led to unwarranted expectations that the business leadership would "do something," or unjustified suspicion that this leadership was indeed coordinating some strategy worked out in the councils of Keidanren.
Keidanren's increasing involvement in questions of long-term economic growth has done much to break down the clear distinction between Keidanren and Keizai Doyukai that once existed. This breakdown has been furthered by the increasing participation in Keidanren by Doyukai activists. Until rather recently most zaikai members tended to concentrate their activities in one or the other of the organizations. Today there is a considerable overlap of membership. Two of Doyukai's past presidents, for example, Iwasa Yoshizane and Mizukami Tatsuzo, are among the most active Keidanren leaders.
As a consequence, Doyukai's role has undergone a subtle change. Doyukai was founded by young executives and represented a different constituency than the more established Keidanren with its ties to the prewar Economic Federation. However, Keidanren, in its official twenty-year history, explains the reason for Doyukai's existence as follows:
The representatives of enterprises or associations in Keidanren are in principle limited to one person each, and these people gather and exchange views at Keidanren from a position of representing an association or enterprise. . . . Thus statements representing the association or enterprise are made at Keidanren, but these same people and other managers have the desire to organize a group as individuals. Keizai Doyukai is organized to meet that desire and wish.
Doyukai is now defined as an organization to give Keidanren members (and others) an opportunity to discuss issues from a more individual position.
Keizai Doyukai, however, is intent on expanding its functions and proving its usefulness as an independent organization. It has developed, paralleling a similar trend in Keidanren, a role as a kind of de facto philanthropic organization in Japan. It sponsors a variety of activities, usually supported by foundations in the United States, from support for English language teaching programs to joint research programs with a number of American organizations. Doyukai's changing functions are best described by the organization itself:
As Japan has achieved a remarkable economic development, Keizai Doyukai has diversified its activities and has undertaken not only the problems of the Japanese economy as a whole, but also such other issues as area development and urban
renewal, small- and medium-sized enterprises, agriculture, research and development, and education.
Like Keidanren, Nikkeiren also has greatly expanded its international role, largely because of its position as the representative of Japanese employers in the International Labor Organization. Internationalization of the economy has also lead it to develop new activities in the area of labor-management relations. It has been sponsoring for the last few years, for instance, an annual cruising seminar for people at the foreman level on labor-management relations, giving them a tour of parts of southeast Asia as well as an onboard education. It recently has established a management training center at the foot of Mount Fuji.
Nikkeiren was founded with the slogan: "Employers, be righteous and strong!" and took great pride in the fact that "at the time of the 'Red Purge' in 1950, [it] assisted in expelling well over ten thousand communists from enterprises, thus finally realizing industrial stabilization." It was to business what Sohyo[*] (the General Council of Trade Unions of Japan) was to labor in the 1950s, and the bitter confrontation between the two organizations forms an important part of the history of the labor-union movement and labor-management relations in the postwar period. In the light of that history it is all the more remarkable to hear Nikkeiren's managing director say at the organization's annual conference in 1964: "I and others want to call on Sohyo also to work harmoniously on labor problems. Sohyo members as Japanese want to work for the development of the Japanese economy. Shouldn't we persevere and keep on trying to move near a harmonious relationship with Sohyo and not attack it as an enemy in [labor] struggles?"
Speaking in 1972, the president of Nikkeiren, Sakurada Takeshi, accented the organization's new posture with the following remarks in regard to that year's coming spring labor offensive:
There would be no other way for employers than to tackle this spring offensive with modesty and seriousness, and to conduct the labor-management negotiations with sincerity, regarding this as a place to educate and be educated. . . . Even when the negotiations fail and dispute [strike?] action is started, the private enterprises must stick to the stand that the "disputes are also the means for education" and wait for the restoration of peace without losing the attitude that both labor and management mutually educate and are educated through the disputes.
Nikkeiren still spends much of its energy in giving assistance to industrial associations and enterprises in their bargaining with labor during the spring struggles, and it still serves as an important organization
in management's dealings with the labor union movement. But as labor has become increasingly concerned with actions to maximize its benefits under the present economic system and less concerned with political action to change that system, the "fighting" nature of Nikkeiren with the emphasis on political confrontation that the term implied in the 1950s has given way to a greater emphasis on research and management-training functions. It has for several years now argued for replacing the seniority and lifetime employment system with "a personnel management system which values individual employee's ability and competence in order to overcome labor shortage and to make Japanese enterprises more competitive in the international market." It has an active research program dealing with issues of wages, promotion and retirement systems, social security and other welfare programs. It has established an Institute of Labor Economy, which does research in such areas as productivity and international wage comparisons, and periodically issues statistics on labor questions.
As big industry regained its strength and grew and set up its own research organs, Nikkeiren found itself playing an increasingly important role for small- and medium-sized enterprises in providing expertise on questions of labor-management relations. Nikkeiren, unlike Keidanren and Keizai Doyukai, has a network of active local branches. While the organization's role as the representative of big business in political struggles with the labor movement is declining, its function as a source of information and advice in dealing with problems of labor relations on the part of smaller firms appears to be increasing significantly.
The official twenty-year history of Nikkeiren provides perhaps the best expression of the organizational adaptation as well as its specific direction of change:
Seen only in terms of [management's] strategy against the labor unions, Nikkeiren may look as though it is becoming just the labor section of Keidanren. But this is nothing more than a one-sided view. It is very clear that now the main focus for Nikkeiren's overall activities is shifting from strategies for opposing the spring struggles and the labor unions to areas of much broader labor-management relations and the development of individual capabilities through its activities in job analysis (shokumu bunseki ), educational development, mutual understanding (ishi sotsu[*] ), and the like.
There are commonalities in the direction of change of all three economic organizations. They all are becoming increasingly involved in international affairs and are expanding research functions in areas where no one enterprise or industrial group performs. Keidanren and Nikkeiren are less involved in the day-to-day representation of Japanese business and employer interests and more active than in the past in the analysis of
long-term trends and in research on problems of concern to the business community in general. In performing such functions Japan's economic organizations are acting in much the same way as comparable European organizations. Keidanren and the other economic organizations are likely to continue to perform important roles for the Japanese business community, but they will not be the consensus-mobilizing and representative roles that were so important earlier in the postwar period. Important as these organizations are, they no longer appear to play the role attributed to them of being "indispensable in achieving consensus and in presenting a united front on issues and problems."
There is minimal career mobility for businessmen into politics and government service. Informal elite coordination has largely broken down with the routinization of the mechanisms created to facilitate such coordination and the weakening of the close personal ties between business and political leaders. Economic organizations do not serve effectively as consensus-mobilizing mechanisms and are increasingly involved in consideration of long-term and general business problems rather than in the representation of business interests on specific issues. Big business can exert considerable influence through political contributions, but such efforts have taken place in an environment in which business has not perceived an acceptable alternative to the LDP and in which LDP leaders have been able to expand their sources of funds beyond the big business establishment.
The ruling elite model of Japanese politics has had to make a number of false assumptions about the organizational unity of the business community, its unanimity of views on specific issues, and its involvement in a broad range of governmental decisions. There are few case studies of decision-making in contemporary Japan, but it may be hypothesized that such studies would show what they have shown in the United States: that different groups participate in the decision-making process depending on the issue involved.
Pluralist theory, on the other hand, has its own weaknesses. By focusing on the participants in the decision-making process, it runs the danger of underestimating or totally ignoring the extent to which certain participants share the values and represent the interests of groups not directly involved in the decision-making process. It can be argued that businessmen have not had to participate in the process directly because the
political leadership and the bureaucracy have shared a common perception of issues and have worked to serve business interests. The contribution of Marxist writings to an understanding of postwar Japanese politics, it seems to me, has been to emphasize this point.
It can be argued that the changes affecting Japan today make elitist theory less relevant and pluralist theory more relevant in the analysis of power and influence in Japanese politics. There was, until recently, a value consensus widely shared in Japan that emphasized rapid economic growth and industrial expansion. While there was an articulate body of opinion on the left that did not share this consensus, rapid growth was a goal to which the Japanese public at large, and not just the business sector, subscribed—a goal that often got translated into practice as what is good for big business is good for Japan.
That consensus is now breaking down. The position as the world's third largest economic power in terms of GNP has created enormous pressures on the government that conflict with business interests. International pressures for greater and faster liberalization and for "orderly marketing," and domestic pressures for improving the quality of life rather than simply expanding the size of the economy are testing, for the first time in a sense, the capacity of the Japanese political and administrative system to respond effectively to conflicting demands. The LDP's continued control of the government depends on its capacity to respond to new demands for a change in government priorities.
It is possible that the LDP will fail to respond to these pressures. Recent election results reflect widespread discontent with its policies. But if the history of the past twenty years is any guide, the LDP will strive to remain a "catchall" political party. Part of the LDP success in staying in power has been its ability to provide minimal satisfactions for all sectors supporting it: farmers, a sizable portion of the working class, in addition to big business, and other groups:
The diversity of interests in the circles from which the Conservative Party draws its money, and with which its leaders have close personal connections, gives the leaders considerable freedom of action. So does the existence of the mass electorate. To win a general election the Conservative Party must be supported by the great majority of middle class electors, and about half its vote must come from the working class. Rational policy requires concessions, and habit has taught the privileged classes reason.
These words about the British Conservative Party are equally applicable to the Japanese conservative party over the past twenty years. It may be impossible for any party in an environment of relatively low economic growth to obtain the kind of broad based support in the future that the LDP has received in the past. But the imperatives of electoral politics
encourages the LDP to seek such support and to avoid becoming the political arm of any one particular interest group.
One might argue that as long as interests in conflict with those of big business remain unorganized, "latent" rather than "manifest" in Dahrendorf's terms, a conservative party in a capitalist society will be responsive to business interests. The late development of interest groups in Japan and their sometimes unique relationships with the government ministries with which they have most contact may suggest that the LDP has been freer to represent big-business interests than the nature of its support base would imply. But this freedom is being increasingly curtailed as the era of one-party dominance comes to an end.
This article has had the limited objective of challenging assumptions on the effectiveness of some of the mechanisms the big-business community uses to exert political influence. I would not deny that businessmen in Japan, as in every capitalist society, can exercise influence over political leaders in ways that are not available to the average citizen. I do argue that the mechanisms considered most important for facilitating the exercise of business influence over government do not do what they are alleged to do.
We know little about the structure of power and influence in contemporary Japan. Nonetheless, images of that structure, reduced to easily remembered and inaccurate stereotypes, have been widely accepted both in Japan and abroad and do not aid understanding of the structure of power in Japanese society. I have tried to challenge some of the notions of how business-government relations exert influence in Japanese politics in the belief that this is a necessary step in building a more accurate understanding of the relationship between big business and political influence in Japan.
Japanese Budget Baransu
John Creighton Campbell
All countries draw up budgets to allocate governmental resources among national needs. Since needs always exceed resources, within every government conflict will occur between spending agencies and the organization assigned responsibility for enforcing restraint. Moreover, certain characteristic budgeting behaviors appear to be common everywhere, at least among the richer countries. Aaron Wildavsky, in his The Politics of the Budgetary Process , calls these behaviors "incrementalism"; he sees American budgeting as historical, specialized and fragmented, nonprogrammatic, sequential and repetitive, and conflict minimizing. More recent research confirms that these observations are valid elsewhere.
Still, even if the broad outlines and procedures of budgetary systems are similar, it would be surprising if they turned out to be identical in detail. Budgeting, after all, plays a major part in "the authoritative allocation of values for a society," and so lies at the heart of a nation's political process. As politics among rich countries differ so must their budgetary systems. What might be the critical determinants of differences among budgetary systems? Those which immediately suggest themselves are differences in national economic conditions, formal or informal political structures, and political culture, particularly elite political culture.
In the course of interviewing Japanese budget participants for a forthcoming study, I became aware of a notion often expressed by the word baransu , a Japanese transliteration of the English word "balance." The word did not refer to equalizing governmental revenues and expenditures, as in American budget terminology; it seemed to mean evenhandedness, or equitable treatment. I also had occasion to examine Japanese budgetary statistics and found that (in comparison with similar American data) these indicated a very balanced pattern of allocations over time. That is, compared with the United States budget, the shares of the budget commanded by each ministry did not vary much from year to year.
These differences between Japan and the United States are expressed in Table 1, which shows average deviations of agency budget growth in one year from the growth of the total budget in that year. A zero would mean that in every year the agency's budget grew at precisely the same rate as the total budget. Institutional arrangements and budgetary classifications are different in the two countries, so this table must be used with caution, but it does seem to demonstrate that Japanese budget allocations do not fluctuate very much. It is as if the new revenues that become available each year are shared out more or less evenly so that each ministry gets about the same proportion of the new as it had of the old. The equilibrium of the previous year is maintained; no "unbalance" is introduced.
This paper is primarily an effort to relate this balanced pattern of budgetary outputs with the norm of baransu or evenhandedness observed among those who draw up the Japanese budget. I will first introduce the Japanese budgetary process, and discuss the meaning of the baransu concept, and then demonstrate how balance is manifest in the budgeting behavior of the three major participants in the process. The conclusions will offer some explanations of why balance ideas are so strong in Japan and suggest some possible effects of this behavior. However, it should be understood throughout that the Japanese budgetary system is still quite similar in many (perhaps most) respects to that of the United States and elsewhere. I have chosen to emphasize differences rather than similarities because they are more interesting. Among the several differences, including Japan's extraordinary economic growth and the unique role of the majority political party in budgeting, balance as an element of elite political culture is given special attention here for two reasons. First, since it shows up throughout the process, tracing balance offers an opportunity to survey many other important aspects of Japanese budget politics conveniently. Second, it seems likely that budget balancing is closely related to similar traits in other forms of Japanese organizational behavior.
The Japanese Budgetary Process
Under the constitution, the annual budget is to be prepared and sent to the Diet by the cabinet, but provisions of the Finance Law assign the responsibility of actual preparation to the Ministry of Finance (MOF) and its budget bureau (Shukeikyoku).
The Japanese fiscal year begins on April 1, so fiscal-year 1970 ran from April 1, 1970, through March 31, 1971. The process begins shortly after the beginning of each fiscal year, when the various ministries and other agencies (henceforth referred to as "the ministries") begin formulating their budget requests for the following fiscal year's budget. In recent years, MOF regulations have required each ministry to limit its request to 125 percent of the budget granted in the current year. To fit the demands of its own sections and bureaus within this limitation, each ministry undergoes a mini-budget process of its own in the summer months. The ministry requests, which usually amount to nearly the maximum permitted, are submitted to the MOF about August 31, after brief hearings that secure the general agreement of the appropriate Liberal Democratic Party (LDP) Policy Affairs Research Council (Seimu chosakai[*] , or Seichokai[*] ) divisions (bukai ).
During the month of September, ministry officials appear at the Budget Bureau to explain these requests to the budget examiners (shukeikan ), who ask questions about program details but do not actually negotiate over budget figures at this stage. In October and November, the grinding work of budgeting is performed within the Budget Bureau as examiners and their staffs go over the requests in detail, discussing possible options with the responsible vice-director (there are three), the director, and other bureau officials.
At the same time, the Budget and Tax Bureau directors, ministry-level staff specialists, the administrative vice-minister, and other MOF officials discuss the total budget figure and other "macrobudgeting" questions. These deliberations are based primarily on an estimate of tax revenues and considerations of fiscal policy in regulation of the economy. Although final decisions do not come until mid-December, rough estimates of the funds available are in the Budget Bureau director's mind as he formulates the bureau's posture toward expenditure requests.
For about two weeks in early December, the MOF Ministerial Budget Conference meets to ratify, and sometimes modify, the draft budget prepared within the Budget Bureau, which is then called the "Finance Ministry draft." This series of meetings encompasses the entire chain of command from minister to examiner (and sometimes his assistants), along with other MOF bureau directors and staff. At the same time, the Budget Compilation Policy (Yosan hensei hoshin[*] ) is drawn up within the Budget Bureau and ratified at the ministry level. This brief and highly abstract statement sets forth the basic principles of the budget, and is passed by the
cabinet at about the same time the MOF draft of the budget is released—despite the fact that, in theory, it is supposed to be the major cabinet-set policy to guide the MOF in compiling the budget.
During October and November, the regular organs of the LDP do not intervene in the compilation process going on within the Budget Bureau, although individual Dietmen will often let their preferences be known (for example, by accompanying groups of petitioners to the Finance Ministry). In December the Policy Affairs Research Council's Deliberation Commission (Seisaku shingikai or Seicho[*] shingikai) draws up the annual LDP Budget Compilation Program (Yosan hensei taiko[*] ). This program is then passed by the Party Executive Council (Somukai[*] ) and referred to the cabinet and the MOF shortly before the release of the MOF draft.
The release of the MOF draft—scheduled for mid-December, though in recent years it has often been postponed until after the New Year holiday—begins the "revival negotiations" (fukkatsu sessho[*] ) period of (since 1962) about a week. It appears that 3 to 5 percent of the total General Account is allocated at this time in response to ministry appeals on MOF cuts and the final demands of the LDP. The latter, called political demands, are formulated in a brief process of LDP Research Council division hearings and recommendations, which are reviewed and adjusted by the Research Council Deliberation Commission and the Executive Council, and then implemented by the leadership through participation in the penultimate cabinet-minister-level negotiations and a final session between party and government top officials.
The budget, as modified, is called the "government draft." It is ratified by a cabinet meeting called immediately after the negotiations with the party and then sent up to the Diet. The opposition parties use the legislative budget deliberations as an opportunity for criticism and questions about government policies, but the budget itself is not amended. After passage, the MOF oversees the execution of the budget, and at the end of the fiscal year, there is a budget settlement and an independent audit by the Board of Audit. This study, however, is limited to the period that ends with the cabinet passage of the government draft.
We may approach the somewhat amorphous idea of balance through examining its formal usage. Kono[*] Kazuyuki, a former vice-minister of finance, said that balance—meaning the comparative balance (hikaku kinko[*] ) among expenditures—is one of the two criteria used by the Budget Bureau in reviewing budgets. Expenditures in the same category, or
similar items, should particularly be balanced, but the balance criterion should also be applied more widely. Similarly the economist Kotake Toyoji identified five criteria for budget review; "balance" meant relating expenditure levels to those of similar or related items. Such explanations indicate the importance of the concept, but do not impart much of its content. When asked to define balance, a high Budget Bureau official said it means a round budget (marui yosan ), one without "bulges" of too much money given to any one program, policy area, or agency.
To balance a budget item one compares it with other items; it is in balance when it is not receiving too much, or too little, relative to other items. A similar idea in American budgeting is "fair share," a "convergence of expectations on roughly how much the agency is to receive in comparison to others" when the total budget is increased. What balance is emerges more clearly by considering what balance is not: it is not setting an expenditure level by assessing how important a program is to national priorities; how effective it has been in the past; or even how much political support it has attracted. In particular, it is not a comparison of two similar or otherwise related programs to see which is better—which produces "more bang for the buck" in a cost-benefit analysis. Quite the opposite—balancing represents avoidance of comparisons among programs and their merits by implying that simply because they are similar they should receive the same or equivalent budgets.
What determines whether two items are similar and require balance? Kono[*] gives three examples. The simplest is that levels of benefits among the various government-supported health insurance systems should be balanced. Second, health insurance in general should be balanced against other social welfare programs like unemployment insurance and public assistance. Finally, compensation in the "postwar settlement" to groups like veterans, war-bereaved families, or those who lost their homes or overseas property should be equitable. Of course, the question of what should be balanced—for example, individual benefits to members of these groups or the budget allocation for the group as a whole—is left open. From an administrative point of view, routine expenses will nearly always be balanced throughout the government, so a ministry will be assigned automobiles by its number of employees or maintenance expenses by square feet of office space. At the opposite extreme, some people hold that entire policy areas, such as social welfare and defense, require balance.
Since each of these expenditure items is assigned to a particular administrative organ, balance may also be seen as equitable sharing among real organizations, whether sections or ministries.
Clearly, balance is not a tightly defined administrative rule. It is best understood in the first place as a value widely shared within the Japanese elite political culture, one that is well understood in principle even if argued about in application. Balance in this sense is an end, not a means. We might say that budget participants simply feel more comfortable when the budget seems to be balanced. However, the strength of this value also gives it two important instrumental functions: in Wildavsky's terms, it is a helpful "aid to calculation" which eases the massive decision-making burden on budgetary participants; and it becomes a major strategic resource for all participants. Finally, the relative strength of this balance value means that other values—efficiency, responsiveness, perhaps even effectiveness—must be relatively weak. Thus, when the Japanese budget system is evaluated in terms of these other values, balance will be found to have dysfunctional aspects.
Balance for the Ministries
The ministries (plus some agencies) are the most salient level of administration in Japan; bureaus may be powerful but lack the coherence and independence typical in the United States. Ministries are large and complicated enough that even internal balance considerations are significant. They appear particularly when budget requests are decided. Since the request for each ministry must not exceed 125 percent of the budget actually received in the previous year, constituent bureaus cannot be permitted simply to ask what they wish. Either a similar percentage limitation must be imposed on each bureau within a ministry, or a miniature budget review process of cutting down bureau requests will be required. Although one informant said that the Ministry of Education followed the first practice (an extreme of balancing, and very stable), the latter is more common; most ministries impose either a softer limitation or none at all.
However, even under the latter pattern, the ministry-level accounting section (kaikeika ) responsible for budgeting will often go to great lengths to maintain balanced treatment of bureaus. For example, a study of the Ministry of Agriculture and Forestry budget process in the early 1960s turned up the following set of guidelines for compilation:
Except for disaster reclamation projects, each public works item is adjusted so that the budgets of the Agricultural Land Bureau, the Forestry Agency and the Fisheries Agency have equivalent growth rates from the initial budgets of the
previous year. Disaster reclamation projects are adjusted restrictively so that the same rate of progress will apply to all.
A mechanical formula like this obviates the need for the ministry's central staff to make value choices among programs, and therefore tends to dampen conflict among the bureaus. Agriculture is a ministry with relatively powerful bureaus. In others, the ministry-level staff (particularly the administrative vice-minister and deputy vice-minister) may have more influence over the bureaus and impose its own priorities on budget requests. Proportionally larger budgets may be requested for those programs that the ministry leadership thinks are most important or will look most attractive to the MOF. The composition of budget requests from such ministries may therefore fluctuate more from year to year than those of more balanced ministries where the bureaus are more powerful.
Once the requests have been settled internally, the ministries turn to the task of obtaining as many funds as possible from the MOF. Over the years they have developed many strategies for this. In the main, perhaps to a surprising extent, the repertoire of Japanese ministerial budgeting strategies closely resembles what is found in the United States and elsewhere; included are tactics using clientele groups, "camel's nose" techniques, substitutions and intricate accounting devices, the occasional lucky "crisis," and so forth. Notable, however, is the extent to which the ministerial budgeter relies on the value of balance in arguing before the MOF. That is, rather than justifying a program or policy in terms of intrinsic merit or national need, he will claim that their item is entitled to the "same" level of effort as some other item.
On the most straightforward level, programs that are very similar in objectives and target groups will be balanced almost automatically. When benefits for one of the government-financed health insurance plans are raised, the Ministry of Health and Welfare will not have a difficult time in appealing for increases in the others. Similarly, increased support for national universities will occasion an appeal to the MOF to raise the government's contribution to private universities. When extended further, the demand for balance becomes a little more tenuous; an increase in college-level funds brings arguments for raising secondary-school support (or vice versa).
If the ministry hopes to receive more funds than can be justified by balancing with current expenditure levels of similar programs, it will have to go farther afield. For example, a Ministry of Education official, commenting on the budget for per-student allocations to private universities, said: "The MOF is usually tough on this item and wants to give us just an increase of 5 percent or so to cover cost increases. Therefore, we usually compare the proportions of the aid given today with prewar figures [for the same program] to show that this is much lower now."
Rather more common than citing prewar figures is the "keeping up with the Joneses" ploy—low Japanese expenditures in a given field are compared with those overseas. The references chosen vary with the program being emphasized: scientists seeking more research funds look toward American government-financed research and development programs; the Ministry of Health and Welfare points out the higher levels of social security payments in England and Scandinavia; the Ministry of Agriculture and Forestry defends its rice-price support system by noting that all industrialized countries subsidize agriculture. Here, rather than seeking balance among specific programs, policy areas, or organizations, the appeal is to a fundamental sense that Japan as a nation should be in balance with its industrialized peers. Undoubtedly, the effectiveness of such arguments is due in large measure to Japan's century-old tendency toward using Western nations as both sources of innovation and bench marks of achievement.
When dealing with broader policy areas, appeals to balance are not as inherently plausible as they are for smaller programs with near-equivalent counterparts. Attempts by the Ministry of Health and Welfare to defend its budget provide an example. In the mid-1950s, it held that giving larger increases to defense than to social welfare would constitute "remilitarization," but when the defense growth rate slowed enough to make this argument unprofitable, welfare spokesmen began, instead, to compare their programs with the public works sector (on the general grounds that people are more important than things). It is interesting that the MOF did not respond to this ingenious rationale by arguing that public works and welfare are apples and oranges, essentially impossible to compare; rather, in 1961, the MOF manipulated its budget categories, adding enough programs usually counted as public works into the welfare total to balance the two sectors, at least rhetorically.
If a ministry cannot make a strong case for a balance in spending for its own policy area with that in another specific field, it invokes the more general notion of budget "share." Unless it can be proved that an activity has declined in importance during the preceding year—and the MOF is rarely venturesome enough to make such statements publicly—the ministry will argue that there is no reason it should not receive the same share of the budget (or perhaps of GNP) that it had previously. In other words, the item should have the same growth rate as the total budget. Such appeals are obviously not useful to ministries like welfare, which are trying to enlarge their budget shares, but for a ministry whose programs are under attack, "fair share" offers an attractive defense.
The most obvious example is the Ministry of Agriculture and Forestry, which despite strong support from the LDP has had to face a long-term decline in the importance of agriculture in Japan's economy. In the mid-1950s, when the total budget ceiling was held constant, this ministry's budget allocation was actually cut for three consecutive years. When growth resumed, ministry spokesmen tried to maintain the "10 percent principle"—that one-tenth of the budget should go to agriculture. Ikeda Hayato, newly installed as prime minister in time for the 1961 budget process, tried to initiate a gradual cutback in the proportion of national resources going to agriculture, but met with vehement protests from the agricultural ministry and its supporters in the LDP; in the end, an enormous grant to the rice-price control system had to be made during the appeals negotiations. The growth rate in agricultural spending again dropped slightly below that of the budget as a whole in the 1965 MOF draft, and the protest from the same quarters was immediate. Such "share-consciousness" gave agriculture and its supporters a reputation for caring little about programs, for desiring only to grab as much of the budget as they could regardless of how the money would be spent. Rather similar was the response of the Ministry of Home Affairs to a cut in local taxes scheduled for 1960 (a time when the financial position of local governments, which this ministry represents, was relatively strong): "Losing this tax revenue was like a man getting hit by a car. Even if the victim is wealthy, he still deserves a solatium."
The Defense Agency might provide a good case study of the helpfulness of balance ideas in a ministry's budget strategy. This agency finds it difficult to formulate objectively convincing budget proposals because it seems unlikely that the self-defense forces will be at war in the near future, and in any case they are limited to defending the Japanese main islands against conventional attack. The military requirements for this task do
not rise very rapidly. Furthermore, political pressures prevent the agency from postulating even a hypothetical enemy, so its planning must be vague, and officials cannot use the familiar Pentagon ploy of racing to keep ahead of real or imagined Soviet military advances. Therefore, rather than basing budget demands on some measure of the exterior threat to the nation, supporters of more defense spending turn attention to the proportion of the national budget or GNP going to their sector. Stressing the point that this percentage has declined over time (until 1969) helps to obscure the rapid rise of the defense budget in absolute terms—because of high GNP growth, it has doubled about every six years.
This "fair share" concept is useful for keeping the defense budget growing at about the same rate as the national budget, but it does not provide an argument for major increases. Hence, defense industrialists and others seeking a large increase in military spending use another balance technique: the proportion of GNP going to defense in Japan compared with the much higher figure for the United States and other advanced countries. Such appeals—to raise Japan's defense GNP share from around 1 percent to 2 percent—are heard far more often than, say, arguments that a new weapons system is vital or that the mission of the forces should be extended. After an interview in which this percentage of GNP criterion had been mentioned several times, a Defense Agency official was asked why—he conceded that it had little real meaning but "is the only objective indicator available."
The Defense Agency example displays all three functions of balance. Deciding a "proper" level for defense expenditures through more "objective" indicators would be most difficult, and so balancing (as a share of the budget, or as a comparison with other countries) offers a far simpler means of calculating budget requests. Just as important, however, is the underlying agreement within the budget system that balance is an important value in itself. Appealing to this norm thus became a helpful budget strategy for the agency.
Balance for the Liberal Democratic Party
Japan is probably unique, at least among capitalist nations, in the degree to which a political party organization directly penetrates the budget process. One or another segment of the LDP structure plays a part in nearly all budgetary decisions from the lowest to the highest levels. Still, the Party's real influence (in the sense of actually modifying budget outcomes) is not as extensive as might be imagined. This is largely because
the LDP's internal processes are so influenced by balance considerations.
Though many have viewed the LDP as "a loose coalition of factions," it may also be seen as a coalition of many other groupings, which might be regional, interest based, or policy oriented. The devices that maintain the coalition vary depending on the salient issues of the moment, but many of them boil down to the principle enunciated by Dietman Fukunaga Kenji with respect to geographical balance in the Executive Council: "If all regions are represented, then no regions are overlooked." To the extent the Party adheres to this principle, its capacity to favor one region or interest over another is, inhibited; choosing among competing alternatives becomes more difficult. Such choices are the essence of budgeting.
There are a number of points for LDP entry into the budget process: individual dietmen seek projects on behalf of constituents; members band together in interest-group-sponsored "Dietmen's Leagues"; influential politicians obtain favors through personal or factional connections; and Party leaders participate in informal high-level discussion on top macro-budgeting issues like the size of the total budget. An important influence, though one hard to measure, is the review of ministerial requests by the divisions of the party's Policy Affairs Research Council in late summer. Although the requests themselves are not often modified significantly after these sessions, the fact that they are discussed, and in effect approved, by the division must be on the minds of the ministry officials who draw them up. Divisional views are also passed along to budget examiners by ministry officials. These and other fragmented interventions may be influential in one segment of the budget, but none has the potential for becoming a comprehensive, fully considered, official, and "rational" party plan. Our attention, therefore, focuses on formal intraparty budget processes, since these are (or at least once were) designed to impose the LDP's will on the budget as a whole.
There is an ideal view of how the party should participate in budgeting, endorsed by many politicians, officials, analysts, and newspaper editorial writers. They agree that although democracy allows an important voice for a majority party in budgeting, it should not intervene in the petty details of administration. The LDP should decide broad priorities for the budget each year, and identify policy innovations and new opportunities for governmental action. Procedurally, this ideal might mean that each division should critically examine detailed programs and plans, recommending which should be initiated or increased and which should be cut
back or abolished. These divisional recommendations should be discussed objectively and from a "national" point of view by the Research Council's Deliberation Commission and the Executive Council. Their report on the highest priorities for the year would then be sent to the cabinet and the MOF early enough to guide the process of budget compilation.
At the creation of the LDP in 1955, many thought that this ideal of party participation in budgeting would be implemented. Business leaders hoped that party unification would bring a strong administration, able to restrain the mongering of popular programs typical of the earlier multi-party system; even some MOF officials predicted that more rational and priority-based policies would replace logrolling of politically favored items through Diet amendments. However, participants were uncertain about what relationship of party to budget would emerge. Guesses ranged from a party takeover of the entire process to complete MOF independence, and even included a proposal to move the Budget Bureau from MOF to cabinet control. The first budget made up under the new party—that for 1956—proceeded through close consultations and cooperation between LDP and MOF leaders, and the Research Council's Deliberation Commission passed a very specific, yet rational and responsible set of budget recommendations. However, this cooperation broke down because pressure from rank-and-file Dietmen, demanding a few more yen for favored projects, could not be controlled by the party leadership. In the end, the leadership was forced to demand additional budgetary "intraparty adjustment expenses" to quiet down their followers, thereby violating earlier promises to the MOF and severely damaging the credibility of the LDP as a budgeting agency.
Budgeting means cutting; requests always add up to more than the resources available, and the purpose of budgetary mechanisms is to reduce these requests to manageable size. Because it controls the cabinet and the Diet, if the LDP within itself could have drawn up an implementable budget plan, it would have absolutely dominated the budget process. Alternatively, even granting that the enormous informational requirements and decision costs of item-by-item budgeting might make LDP production of a fully detailed draft impossible, concrete statements of priorities plus a realistic selection of new programs were well within the party's technical capabilities. Such a program was attempted in 1956 (and a few times afterwards), but floundered on the party's inability to control itself. In 1956 and repeatedly thereafter, the LDP demonstrated that it could not aggregate the interests and opinions of its constituent parts effectively and then enforce its final decisions. This fundamental problem is seen clearly in the LDP budget process as it appeared toward the end of the 1960s.
The building blocks of the party's official Budget Compilation Program
are the reports of the Research Council's fifteen divisions. These divisions correspond generally to the ministries, and range in size from 44 members in the foreign relations division to 155 in agriculture and forestry. Many members serve at their own request. Division-ministry relations are usually very close because of a number of factors: the many ministry ex-officials influential in the divisions; the ability of officials to implement a Dietman's policy ideas and aid his constituents; the importance of LDP contacts for an official's future career both inside and outside his ministry; and simply the ties that grow naturally from long association.
It is sometimes fruitful to regard the LDP organization as the real legislature of Japan; from this point of view, the Research Council divisions are equivalent to American legislative (not appropriations) committees. They are intimately concerned with the affairs of their corresponding ministries and ordinarily support their interests, inside and outside the party, against the competing claims of other agencies. According to ministry and party informants, divisions seldom oppose any portion of a budget request, and independent new suggestions from them are also rare. They commonly wish to see even more spent than the ministry has requested (though the 125 percent limitation normally prevents these desires from being included in requests), particularly for items with great local-constituency, interest-group, or popular appeal. During the budget process, divisions will often help coordinate tactics among interest group representatives, supporting Dietmen and ministry officials, and generally act as "cheering sections" for their ministries.
There are exceptions to this pattern. Divisions have been known to disagree sharply with their ministries on small or large points. Still, even in these cases, all divisions always call for more expenditures within their policy sectors. Statements such as "our policies x are important, but expenditures here should be deferred this year because policies y are still more critical" are never encountered. Therefore, if a comprehensive plan is to be prepared, the ministry-by-ministry reports must be aggregated by an upper-level body in the LDP—the Research Council's Deliberation Commission. This commission is made up of fifteen to twenty members with "impressive credentials"; it meets several times in early December to evaluate written and oral divisional recommendations and to draw up a draft of the Party's Budget Compilation Program. This program is then ratified—sometimes after a few deletions, additions, and changes—by the Executive Council.
An examination of the Budget Compilation Program for the 1970 budget will give an idea of the character of these documents. It is divided
into two unequal parts; the first, called "basic policy" (kihon hoshin[*] ), has seven items. Six are unexceptional slogans calling for growth without overstimulation, tax cuts, elimination of supplementary budgets, slowing inflation, administrative savings, and healthy local administration. Number 6 lists expenditure priorities: "emphasis" on social capital, comprehensive agricultural policies, promotion of small business, environmental problems and traffic safety, and reductions in nonessential items. The second part, "important policies" (juten[*] jisaku ), is over ten times the length of the first part and has fourteen major headings (for example, "The Renovation of Education and the Promotion of Science and Technology"). Each is followed by several items, which in turn have subitems; the total number of entries not further subdivided is 116. The translation of one will give the flavor of this document. Under the heading "Promotion of Agriculture, Forestry, and Fishing," one of the three subitems under item 3, "Promotion of Fishing," reads:
Along with accelerating fishing-harbor construction, seashore-preservation works, and repair and construction of roads to fishing harbors, the establishment of large-scale underwater rocky areas for fishing, the development of new fishing grounds and structural reform works for coastal fishing will be systematically promoted.
Not all are quite this broad, but it will be appreciated that the 116 entries can cover a lot of ground. Indeed, most governmental programs are included somewhere in this document.
Thus the Budget Compilation Program is comprehensive, and because it is the product of detailed hearings followed by due deliberation and ratification by official party bodies, it may also be called exhaustive and authoritative. On the other hand, is it practical and influential? No, for at least three reasons: (1) No monetary figures are attached to the recommendations. For the most part, the document simply urges that each program be "stressed," "completed," or "strengthened." (2) Final passage of the program comes only two to four days before the MOF draft budget is released, too late to guide the compilers. (3) There is virtually no indication of priority among the programs recommended. The fourteen headings under "important policies" provide a shopping list in almost arbitrary order. It is true that six expenditure programs are singled out for attention in item 6 of the "basic policy" section, but this is not at all a plausible list of the party's priorities for the 1970 budget, since other evidence indicates that no unusual attention was given to social capital or small business that year, and the themes of pollution and traffic safety
were hardly mentioned again by LDP budget participants (agriculture did get extra attention in 1970, but this item is included in the "basic policy" list every year). And needless to say, the Party made no efforts toward reducing expenditures on nonessential items; quite the opposite.
If it is true that the LDP potentially could control the budget process through this program, why has it not done so? And if the document has no real effect, why is it still produced so laboriously? The answers to both questions have to do with "balance." Everything is included in the Compilation Program simply because then nothing need be left out, and each division's desires are represented. The policies are not listed by priority because this would represent a judgment by the Deliberation Commission or Executive Council that one division's recommendations are inferior to another's. Money figures are not included partly because, if they were cut, there would be opposition from the divisions, and if they were not cut the total would be embarrassingly large, well beyond any possible budget. (It should also be noted here that the LDP does not have the staff capability to prepare a specific "alternate budget," and that the MOF has pursued a consistent strategy of inhibiting other participants from discussing actual amounts of allocations.) Commission and council members, and LDP Dietmen generally, realize that the practice of making the program vague, all-encompassing, and late prevents it from having any influence, but have implicitly decided (after several attempts) that trying to reform the process is useless.
However, survival of the Budget Compilation Program should not be regarded as merely vestigial. It does have real functions. One is public relations: the document is given wide circulation and is designed to show both the general public (note the pollution and traffic safety items) and specific interest groups (agriculture, small business, local governments, and almost all others) that the party has their interests at heart. Perhaps more importantly, many Dietmen actively participate in this process and have their views taken into account in the final document. Finally, blame for omission of any recommendation in the final budget can be laid to the MOF, not the party, thereby mitigating resentment against the leadership. The "balance" of this symbolic output therefore functions to maintain satisfaction among party members and clientele.
However, not all products of formal LDP processes are merely symbolic in impact. At the later "revival negotiations" stage, under much more hurried conditions and without gestures toward public opinion, a truly influential set of recommendations is brought forth. This process begins shortly after the release of the MOF draft budget, when divisional members talk over the MOF cuts and possible responses with ministry officials. The divisions also receive copies of ministerial request forms, which they label with A, B, or C to indicate priority. Then, in a hectic, one-day series of hearings, the Research Council's Deliberation Commission listens to spokesmen of all the divisions (plus many related special
committees and investigatory commissions) and marks these forms with its own symbols. For the most part, divisional recommendations are marked with equivalent symbols by the commission, preserving balance. However, some are marked with the marusei (a circle containing the character sei , which participants say refers to either seiji , politics, or seisaku , policy). This symbol indicates an item of party concern that should be taken up at the political level—either the cabinet minister negotiations (at which the Policy Affairs Research Council chairman is present) or the final top-level LDP-MOF talks. In 1970, about one-fifth of the items marked "A" by the divisions also received the marusei label. They represent real choices, true budgeting behavior, rather than the more usual evenhanded sharing out of benefits.
To support this point we may examine the contents of the thirty-nine marusei recommendations for 1970. Their distribution by ministry was very uneven: twelve went to the Ministry of Agriculture and Forestry, nine to the Transport Ministry, and although the Ministry of Construction received only four, they covered 80 percent of its budget. The remainder was scattered much more thinly among the other ministries. Over half were for various types of public works. This pattern reflects the LDP's interest in programs with great appeal to local constituencies, particularly in rural areas. Notably absent were programs that drew much broader, but more diffuse, public interest—for example, pollution and traffic safety, emphasized so strongly in the earlier Budget Compilation Program, were completely ignored.
Indeed, these revival negotiations recommendations are not publicized by the Party and are written in a budget shorthand nearly unintelligible to outsiders. Few in number and quite specific, the marusei items are taken seriously by the ministries, both the rank-and-file leaders of the Party, and MOF budgeters. The LDP here sacrifices balance for effectiveness, symbolic image-creation for a real role in budgetary decision-making. Not that balance is completely neglected: virtually all divisional recommendations are formally endorsed somewhere in the Deliberation Commission's report, and when two divisions propose contradictory items, as commonly occurs when ministries battle over which will control a new activity, the commission may well grant the marusei impartially to both. At least eight of the thirty-nine marusei items for 1970 represented such overlaps, and two remained even after the report had been tidied up by the Executive Council on the following day.
The last point reflects on a claim often put forward by defenders of the
LDP's role in the Japanese policy process, that the Party can effectively intervene when two ministries are at loggerheads, or on behalf of new activities that fall between the jurisdictions of two or more ministries. At least in the budget process, which is the major stream of domestic policy-making, such conflict resolution seems to occur rather rarely. Much more commonly, divisions back up their ministries, and the two aggregating bodies will lack the capacity to violate balance by choosing one over the other or by imposing an independent solution.
More generally, party spokesmen often talk of party "dynamism" and flexibility, contrasted to the stodgy conservatism of the bureaucracy. This comment by an LDP leader's staff director in an interview is typical:
Bureaucrats are awfully good at riding along on an old policy, like a locomotive driver, but they can't change direction. This is because of organization . . . because of organizational ties, they can't start something new. The party, on the other hand, doesn't have to worry about the organizations fastened to [old programs] and instead can ask, what is the problem for the people? What did they ask for in the last election? So the party can become the engine to change policy.
Such statements are not devoid of insight; the party can sometimes free itself from the domination of pressures from below. However, its ideas usually originate in the ministries, and it rarely presses for programs against ministry interests. Its strongest positions are taken on those programs with the closest ties to the votes of specific groups (farmers, pensioners, local officials) and do not change very much over time.
Furthermore, the negative and inhibiting effects of party influence in budgeting must not be ignored. From the MOF point of view, it is party support for wasteful or "backward-looking" programs—such as agricultural price supports and deficit-ridden local railway lines—that prevents a shift of resources into newer and more pressing fields. In its 1968 "break fiscal rigidity movement" (dakai zaisei kochokuka[*] undo[*] ), the MOF singled out LDP protectionism as a major contributor to budget inflexibility. As long as the leadership of the LDP remains responsive to its lower level organs, and they, in turn, are so closely tied to ministries and other clientele groups, intervention by the party will not disturb the long-term balance of Japanese allocation patterns.
Balance for the Ministry of Finance
The Ministry of Finance stands at the center of the Japanese budgetary
process, and its budget bureau is the only full-time participant. The MOF's authority to prepare the budget (yosan hensei ken ) is jealously guarded against interference from outsiders. With its near monopoly of information on the budget as a whole and its specialized skills, the MOF is in a strong position to implement its own policies if it desires to do so. Balance ideas influence MOF budgeting behavior in all three ways: as an aid to calculation, a strategy, and a value in itself. These are intermingled in practice, but may be separated for analytical purposes.
The most obvious case of balance as an aid to calculation, often cited by officials, is when concrete relationships between two programs dictate that a rise in expenditures for one requires a similar hike in another. The amount for the second program thereby might be set almost automatically. Balancing routine administrative expenses is also relatively straightforward: examples include salaries, unit prices for materials, building maintenance, and numbers of government cars per hundred employees—all established on a government-wide basis so that ministries will not be treated "unfairly." However, balancing administrative expenses often extends beyond those that are obviously routine, as in provision of computers or allotments for travel, where it could be argued that needs of ministries vary widely. Reflecting on this problem in an interview, a budget examiner recalled:
Travel expenses were needed for an international economic conference in Bangkok; here, we balance so that, for example, the Ministry of Construction will not have a full delegation and the Ministry of Agriculture and Forestry only half that number. This is checked with great care . . . it is not a matter of policy questions . . . we really pay attention to this extremely routine work of maintaining balance. This is traditionally what has controlled most thinking about budgeting in Japan.
Though it might be that one ministry really should have sent more participants than the other, such a judgment would require the examiner to investigate the meeting's substance and would irritate ministry officials. It is easier to be equitable.
Such considerations extend beyond administrative to policy expenses. Particularly when expenditures within a single budget category are allocated to different ministries or among different programs, there is a tendency for them to grow at similar rates. A budget officer from a
ministry concerned with public works commented: "If the total budget for public works goes up about 10 percent, the public works budget of each individual ministry should also get a 10 percent hike. Unless there is some special reason, they won't sharply cut or raise only our ministry's public works budget [share]." Partly to maintain balance, public works are handled by a specialized budget examiner. This is not true of the "promotion of science and technology" budget, but as a former high budget official noted, similar considerations prevail:
To some extent, a standard is set [medo o tsukeru ] for promotion of science and technology, for example, that it should go up 15 percent next year. The various examiners then keep this in mind while reviewing their ministry's budget. The system is used because of fear of unbalance—for example, among the three Budget Bureau vice-directors, one might be enthusiastic about science, so this budget [for the ministries in his purview] would go up 20 percent, while another with no interest would keep it down to 10 percent.
Again, if a standard growth rate is set for all elements of a category, the need to evaluate and compare individual proposals is largely obviated.
Even when programs are not formally related by budgeting categories, any shared characteristics may be taken as a justification for balancing. The example cited by Kono[*] Kazuyuki is the "postwar settlement." The repatriates' case in 1967 was extremely difficult for the MOF, not only because of intense political pressures, but also because property records were chaotic and there were no obvious guidelines for deciding the amount of compensation. Accordingly, the MOF held to a position that the grant should be balanced with earlier payments to equivalent claimants, with the precedents of these cases cited as part of MOF proposals on the amount of payments to individuals or households, the total burden on the budget, methods of payment, and a formula to adjust for inflation.
As well as simplifying calculation, such appeals to balance are important strategically. Prime Minister Sato[*] said of the repatriates' case that "since solving the overseas property problem puts the lid on the 'postwar settlement,' I hope it will be kept in balance with other compensation matters." This hope was motivated by a fear that if the repatriates got more than the other groups, these would then demand an equal or better supplement, and the "settlement" would become unsettled.
Conversely, the earlier precedents provided the MOF with its best arguments for opposing the much larger demands from the LDP. The MOF frequently will draw a connection between a program in dispute and some settled matter to claim that the two should be kept in balance.
For example, when the Ministry of Health and Welfare asked for a 21 percent hike in public assistance payments for 1963, the MOF replied that this increase should be kept in balance with that in public employee salaries (7.2 percent that year) because both were supposed to meet increases in the cost of living. Such gambits can become rather tenuous. In 1967, this ministry had set its sights lower, asking just a 5.5 percent raise (the same as the previous year), but the MOF offered only 4.5 percent on grounds that the public employees salary raise had dropped off from 7.2 to 6.9 percent over the two years so welfare payment growth should slow down too. The particular logic of each argument is not important; the point is that notions of balance are often used tactically by the MOF in combating demands for individual program increases.
Probably more significant from a strategic perspective is the negative, inhibiting effect of balance on MOF behavior. Its officials are well aware, as a Budget Bureau director put it, that "there is nothing a ministry dislikes more than a 'share-down' in its budget." This means, for one thing, that the MOF must be extremely careful about trying to cut individual budgets, even relatively. The record shows that nearly all the MOF's antispending campaigns have been devoted to across-the-board cuts—equal percentage reductions in certain categories of administrative expenses or subsidies (hojokin )—even though MOF officials believe that waste is much more prevalent in some ministries than others and know from experience that such campaigns have virtually no effect. More subtly, even giving an unusually large increase to a certain program of high priority can be dangerous because supporters of other, somehow similar programs will feel that balance has been violated. Since an allocation once offered can never be reduced, there is risk of a general "level-up" that will increase total expenditures significantly. For the MOF, maintaining balance is usually seen as the safest course.
A final interesting example of a positive use of balance as a strategy may be offered. Throughout the 1960s the MOF was plagued by the rapid expansion of two programs with strong political backing: subsidies for rice prices and the government contribution to health insurance. From 1960 to 1969, the deficit in the Food Control Special Account, made up from the General Account (that is, ordinary tax revenues), rose from only 0.7 percent of the total budget to 4.5 percent; in the same period, health insurance costs rose from 3.6 to 7.1 percent of the total budget. At least until the end of the period studied, attempts to restrain these programs were ineffective. However, when the organizational budget breakdown is examined, the Ministry of Agriculture and Forestry share rose only from 9.4 to 10.5 percent in those years, and the Ministry of Health and Welfare
from 10.1 to 13.4 percent. Since both programs are included within the budgets of their respective ministries, this means that the remainder of Ministry of Agriculture and Forestry programs actually declined in budget share from 8.7 to 6.0 percent; for the Ministry of Health and Welfare's remaining programs, the decline was from 6.5 to 6.2 percent (smaller, but perhaps more significant in light of the consensus that Japanese welfare programs should be "catching up" with the West during the 1960s). Operationally, as explained by an agricultural official, "it is a fact that the Foodstuffs Control item has expanded, and this has 'oppressed' [appaku ] the budgets for other agricultural programs. [In reviewing our budget] the examiner will sometimes say that the rise in this item makes the rest of the budget 'difficult.'" This is balance again—a view that the budgets for these ministries or these policy areas should occupy some vaguely defined "fair share" of the total. If one component rises swiftly, the others must grow more slowly. In effect, each ministry (or policy area) has a framework (waku ) which it should not exceed. Indeed, the Ministry of Agriculture and Forestry counterstrategy here has been to say that rice supports are a separate problem from the rest of agriculture, not controllable by the ministry, and should therefore have a separate framework (betsuwaku ). A similar, more general use of this strategy is the frequent MOF demand that any ministry seeking new programs should first eliminate or cut back older programs by a similar amount.
It is logical to ask about the reverse case—a ministry that administers a rapidly diminishing program. Does the MOF compensate for its losses? One such case is the Ministry of Labor; its largest program—unemployment compensation—has fallen off with the growing demand for labor produced by economic development. Statistics indicate that the labor ministry has not kept pace with other ministries: its budget share slipped from 2.4 percent in 1960 (3.0 in 1955) to 1.7 percent in 1969. On the other hand, interviewed officials claimed, and other observers agreed, that new programs proposed by the ministry were approved by the MOF rather more frequently than usual. In part, this relatively soft treatment may be due to the Ministry of Labor's skill at justifying its requests, but quite possibly it is also a function of the MOF's regard for balance as a value in itself, beyond its sheer utility as simplifier or strategy.
The point that the MOF sees balance as a value for its own sake, more than just an aid or strategy, is sustained by examining its view of the LDP's role in budgeting. While conceding that a majority party in a democracy should have a voice in budgeting, the "finance bureaucrats"
tend to be disdainful of politicians, interest groups, and other bureaucrats who seem subservient to them. An examiner was reputed to have said to an official from the Ministry of Transportation: "You are no better than your bosses—the cab drivers." Political intervention in budgeting disturb balance, and the MOF will at times use its own influence as a counterweight to such distortions. It may give less rigorous examination to requests from entire ministries with relatively weak political backing, such as labor or education, or to individual programs within one ministry since the LDP is rarely equally supportive of all ministry activities. In such cases, the MOF makes common cause with spending-ministry officials who are themselves concerned about maintaining internal balance against political pressure. A Ministry of Construction official said:
Interest groups and Dietmen tend to be strong on highway and river projects; in the end, their weight falls here, first in pressure on us and then on the MOF . . . since we know this will happen, at the beginning we really push areas like urban development and housing. The highway and river budgets will go up regardless so we work on the others. If we don't do this and just ask for everything equally, the budgets for housing, sewers, parks, and so forth will be very small. Our strategy is: because it's hard to get, do it first—the Dietmen will take care of the rest.
Finance Minister Fukuda made a remark in 1966 that indicates the MOF's willingness to collaborate in this strategy. He observed that he had to be sure to get sufficient funds for housing into the MOF draft budget because, unlike rivers and highways, it would never get enough political support in the appeals negotiations. The MOF also assists by keeping negotiations with the ministries private, allowing ministry spokesmen to continue making public statements that they are backing up group or party demands to the hilt while actually pushing for less popular programs.
Further evidence of MOF concern for balance is provided by a look at the course of its reforms in the budget process itself. One example is the imposition of a limitation on ministry budgetary requests. The limitation began in 1961 at 150 percent of the previous year's actual budget, was dropped to 130 percent in 1965, and finally to 125 percent in 1968. Such limitations encourage a balanced budget since no ministry can request much larger amounts on grounds of high policy priority, and this in turn diminishes the possibility of a shift in expenditure patterns. The fact that late requests over this limitation have sometimes been allowed merely softens the impact of this reform.
Two other examples both occurred as part of the 1968 "break fiscal rigidity movement," the major occasion when the MOF took the offensive against pressures for more spending. One was called "comprehensive
budgeting" (sogo[*] yosan shugi ), meaning the elimination of supplementary budgets. Each year, one to three supplements had been passed, amounting to from 2.5 to over 10 percent of the total final budget. It had become customary to devote most of these supplements, beyond the relatively nondiscretionary amounts needed for natural disasters occurring during the year and the mandated local allocation, to two items: salary increases for government employees, decided by the cabinet after recommendations from the National Personnel Authority in midsummer; and the deficit in the Foodstuffs Control Special Account, which depended on decisions, reached by a complicated political process, on the prices for rice paid to producers and asked from consumers. Also, the total amount of the supplements had come to take up most of the natural revenue increase (shizen zoshu[*] ), the surplus created by underestimating economic growth and tax revenues in the original budget. This meant that the decisions on salaries and rice prices, which were supposed to be based on "objective" factors, in fact were heavily influenced by the amount of money actually available—if the economy was booming, tax revenues would be strong, and these two items would tend to be large. Not only is this behavior procyclical in fiscal policy terms, but from the MOF's point of view, it allowed these two expenditures to grow more quickly than they should. Under "comprehensive budgeting," provision for the rice subsidy and salaries (as well as disasters) was to be made in the initial budget, covered by a "full" revenue estimate, so these decisions could be brought back into the competition of the regular budget process and thereby kept within overall balance patterns.
Finally, the MOF also proposed to modify the revival negotiations process in 1968. Up to that time, the funds added to various items during this period had come from "hidden resources" (kakushi zaigen ), which were secreted away in accounts under MOF control so only MOF officials knew the amount available. In the mid-1960s, this had amounted to some 3 to 4 percent of the total budget. Partly because the mystery of the figures had encouraged the ministries and party to continue asking for more money, the MOF substituted for this system two devices known as "public resources" (kokai[*] zaigen ). One, called "secretariat adjustment expenses" (kanbo[*] choseihi[*] ), was a sum in a range around ¥10 billion (about $28 million) each for the larger ministries, from which the staff of each ministry was allowed to make allocations among the new or established programs it thought most deserving. The other was a larger amount (¥50 billion or more) reserved for "policy-level" decisions—those taken at the level of cabinet minister or MOF-LDP negotiations, and identified in the MOF draft as "adjustment expenses" (choseihi ). These innovations meant that the MOF was formally renouncing the possibility of making these last decisions itself on programmatic or "merit" grounds in favor of simply
dividing up the remaining resources equitably, allowing the ministries and then the party to decide how to spend them—clearly a victory for balance.
Actually, this reform is not much of a watershed in itself because the degree of its implementation in 1969 and 1970 was somewhat questionable. The reform also seems little more than an institutionalization of a tendency already quite powerful within the MOF; although evidence is hard to gather, it appears that a high proportion of budgetary decisions formally in Budget Bureau hands had already been heavily influenced by ministry opinions. Direct or indirect queries of a ministry's priorities among programs were common in both the September budget request explanations and in later calls from the examiner to the ministry for further information. The most difficult questions were routinely postponed until the revival negotiations where, under either the old or new system, ministry voices are strong. The Ministry of Health and Welfare's budget requests for 1970, which included proposals for forty-eight new items, illustrate the postponement tactic. Of the new items, only one was clearly approved in the MOF draft prepared independently by the Budget Bureau, but at least nineteen more had been approved by the end of the revival negotiations.
This sort of evidence, though fragmentary, indicates that the MOF has in effect been giving up some of its power to decide on individual programs, and the reforms in the budget process noted above both contribute to and symbolize this trend. The point may be made more clearly by contrasting two ideal-type budget processes. In the first, which might be termed "strong MOF," ministries ask for everything they desire; the MOF evaluates their requests and allocates most of the available funds among them as it sees fit. The ministries (and the LDP) then ask again for additional funds for some programs, and the MOF responds by adding on small increments as justified and necessary. The second ideal type could be called "weak MOF." Here, ministries decide priorities among programs before making requests (to stay within the 125 percent limitation); the MOF makes only mechanical decisions on routine items, postponing the difficult decisions. In the revival negotiations, each ministry (and the party) is allocated a lump sum by formula from which it makes its own decisions about programs. Neither ideal type ever existed in pure form, but the process in the mid-1950s more closely resembled the "strong MOF" pattern whereas, by the late 1960s, the "weak MOF" type was not far from reality.
Why did the Ministry of Finance give up so much of its power, for the most part voluntarily? I will attempt a brief and speculative explanation. Budgeting decisions may be divided into two categories: "microbudget-
ing," individual consideration of each detailed program; and "macrobudgeting," issues like the size of the total budget, the amount of deficit financing, revenue estimating, and economic regulation through fiscal policy. Traditionally, the MOF had considered itself dominant in both spheres, but three trends in the 1955–1970 period led to a partial redefinition of its mission: (1) in common with other advanced industrial nations, there was increased concern for governmental regulation of the economy, the responsibility for which lay with the MOF; (2) with economic development, governmental programs became more numerous and complicated, and thus informed judgments demanded more expertise in ever more specialized policy areas; and (3) the Liberal Democratic Party was established and grew in confidence and power. The last point is important because the LDP, responding to the interest groups and spending ministries that make up its clientele, has been far more interested in specific microbudgeting questions than in macrobudgeting. The Party did not hesitate to intervene to obtain more funds for favored programs, and these interventions began to impinge on the MOF's autonomy in macrobudgeting decisions and even internal organizational matters. Facing a choice among priorities, the MOF sought to protect its near monopoly over macrobudgeting decisions and its organizational boundaries by allowing control over individual program spending to slip away to the experts in the spending ministries and the LDP politicians.
If this line of analysis is correct, it would follow that most conflict would develop in areas of overlap between microbudgeting and macrobudgeting, where individual programs have an impact on overall budget problems. This has indeed been the case. Most LDP-MOF battles have occurred over items like agricultural price supports, medical insurance, and railroad deficits, when fixed costs have threatened to push up the size of the total budget or inhibit fiscal flexibility (as in the "break fiscal rigidity movement").
How does this shift relate to "balance"? To oversimplify, a major problem in any budgeting system is how to decide on sectoral allocations—the relative amounts to be given to policy areas like education, welfare, defense, and public works—or to each ministry. If the budgeting authority is itself making decisions on each individual program, sectoral allocations will emerge almost automatically from a bottom-up additive process. In Japan, such individual decisions have largely been given over to the fragmented spending ministries and the party. It is still possible for someone to make broad policy judgments—that education, or welfare, or the build-up of social capital deserves greater emphasis this year, and therefore its growth rate should be higher than for other sectors. But to the extent that no participant is willing or able to make such broad policy
choices, little alternative remains but to confirm the existing pattern of allocations and have each ministry and sector receive about the same budget share as it had previously. This is "balance." And although I must again emphasize that all budgetary systems are terribly complex, that they resemble one another more than they differ, and that all the tendencies illustrated here may be found in every system, I conclude that "balance" is particularly significant in Japan.
We may now speak of cause and effect. Why should balance be so important in Japanese allocation patterns and elite political culture? And what difference does it make to how the business of the nation is conducted?
An attractive and immediately available explanation of why balance ideas are so prevalent in Japan is that of culture, perhaps even the Japanese "national character." That is, balance appears to correspond to many traits that anthropologists and others consider as typically Japanese. For example, Chie Nakane notes that in Japan "democracy" means that "any decision should be made on the basis of a consensus which includes those located lower in the hierarchy . . . it should leave no one frustrated or dissatisfied." A dislike of open conflict is also frequently noted. A case might thus be made that the Japanese budgetary system inevitably tends toward making decisions through relatively impersonal and mechanistic administrative devices that reward all equitably.
Such an argument has merit and is difficult to contradict. Still, I would prefer to emphasize the equally valid point that all budgetary systems probably have strong tendencies toward decision-making patterns that avoid value judgments. This is both because value judgments among programs are technically and intellectually very difficult and because making such judgments opens the decision-maker to attack from the disadvantaged parties. Therefore, budgeters will attempt to routinize their decisions—and balance is a sensible method of routinization—so long as they are not prevented from doing so.
If, then, balance or something like it is the "normal" mode of budgetary decision-making, what must be explained is not stability in allocation patterns from year to year, but deviations from stability. What factors might influence budgeters to change the decisions they made last year? One common situation is when some programs have to be increased because of inflation or other unavoidable cost increases, but resources are not sufficient to provide equal hikes for all programs. This has often been true in American budgeting, but in Japan rapid economic growth has
produced enough "natural revenue increase" each year to take care of cost increases with some left over. Budgeting is more comfortable.
Another and probably more important factor is illustrated by Table 2, which lists changes in budget share over a ten-year period (1961–1970) for the standard functional categories of the Japanese and American budgets. It is readily apparent, first of all, that the American shares have changed
more than the Japanese shares; in part this is because of the greater year-to-year stability shown in Table 1. But attention should also be directed to the items showing the greatest changes in the two countries. For Japan, these are in large measure items that are nondiscretionary, not part of decision-making on expenditures: "special foreign obligations" are mostly determined by old treaties with countries receiving war reparations; the increase in "national debt" expenditures is a product of the advent of deficit financing in 1965 (a decision on revenue mix, not allocations); and much of the change in "manufacturing and economy" is the increased deficit in the rice-price-supports program, supported by political pressures (leading to a "nondecision") but caused primarily by growing harvests and changing consumption habits, which turned Japan from a rice-deficit to a rice-surplus country.
The "unbalanced" American items have a different character. The enormous increase for "community development and housing" is a figment of accounting peculiarities and should be ignored, but those for the other three—"space research and technology," "education and manpower," and "health"—may be legitimately compared with the Japanese figures. All are the direct result of clear presidential decisions: Kennedy's to reach the moon; Johnson's—in response to the civil rights movement and urban riots—to initiate a "war on poverty." It is clear that the president has had a major impact on American allocation patterns, while no one has had a comparable impact on the Japanese patterns.
Two points may be offered by way of partial explanation of this difference. The first is that Japanese prime ministers have tended not to hitch their political fortunes to domestic issues, at least those requiring money. The chief exception is Ikeda and his income doubling plan, but his policies had more impact on macrobudgeting matters than on allocations (Tanaka is another exception, but his premiership lies outside the period of this study). The second, more structural point is that the prime minister does not occupy anything like the president's key position within the budgetary process. He may conciliate, mediate, and occasionally adjudicate, but he rarely intervenes actively, and his influence over the Ministry of Finance does not compare with the loyalty of the Bureau of the Budget to the president.
A complete discussion of the reasons for such passive prime ministerial behavior in this period would have to include the relative lack of newly formed pressure groups or social movements calling for more spending, the stability of LDP control of the government, a consensus within the elite on national goals, a historically nurtured respect for the bureaucracy, and Japanese styles of leadership behavior in other settings. These are beyond our scope. It is appropriate to point out, however, that the prime minister himself is not unaffected by considerations of balance. He holds his office because he is president of the majority party and, as any study of the LDP will show, maintaining this position requires keeping a majority of
Dietmen satisfied, and balancing off interests of factions and other groupings within the party. The prime minister has most often found that the benefits of strong leadership in domestic policy matters are outweighed by the costs of such a position. Similar calculations apply to the other institutions in a structural position to influence overall allocation patterns, and therefore, none has intervened. Budgeting in Japan has been left to the budgeters. This may well be the primary reason for its expenditure patterns remaining so stable.
What have been the effects of balance and stability? Supporters of programs that are not enthusiastically backed by the LDP, such as public housing, welfare, and some education programs, have clearly benefited by the availability of appeals to fair share. Balance values have served as a counterweight to political pressure. More generally, conflict has been lessened and harmony promoted within the budgetary system. But perhaps the major positive effect of balance has been the avoidance of "boom or bust" financing patterns, which can severely damage the morale and effectiveness of an agency. Under the Japanese pattern, most program decisions are left in the hands of ministry experts. By extrapolating from past budgets, they are able to make accurate estimates of the resources to be available in the future, and thus can plan their activities realistically.
However, at least from the vantage point of a distant observer, the costs of maintaining balance over the long run would appear to be more significant. The annual budget is an expression of the government's policies—responses to the needs of the society. It is inevitable that these needs must change as the society changes. Japanese society has changed during fifteen years of extraordinary economic growth, and while the shape of the budget in the mid-1950s may have been quite appropriate for national needs and goals at that time, by the same token it seems improbable that the same mix of policies would be optimum in the 1970s. Balance tends to prolong the life of programs that are wasteful or no longer required, and to inhibit the shift of resources into higher priority areas and the initiation of large new programs, particularly if they threaten the jurisdictions and budgets of the existing ministries. The responsiveness of the government to its environment is severly limited. One would expect that if balance continues to dominate budgeting for too long, strains and dissatisfactions would build up to a point where they would have to be relieved by rather sudden and large budgetary adjustments. Such a crisis would allow a clearer assessment of the delicate relationships and mutual expectations that make up the Japanese budgetary system.
A Government Ministry:
The Case of the Ministry of International Trade and Industry
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.
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.