MITI and the Japanese miracle Read online

  *

  Promotion to section chief is virtually guaranteed to every career officer who does not make some major mistake. Table 5 shows the relative speed of promotion as of the end of 1975 for the various classes in the five economic ministries. It reveals that although both the Finance and MITI vice-ministers were from the classes of 1944, Finance was three years slower than MITI in making its new officers chiefs of section (in 1975, the class of 1958 at Finance was just getting their sections while at MITI the class of 1961 was already at that point). Competition over promotion begins beyond the section chief level.

  There are only a limited number of bureau chief positions in a ministry, and obviously not every member of an entering class can have one. Those who are promoted are still in the running for the vice-ministership; those who are not are compelled to resignor, as it is known in the Japanese government, to "descend from heaven" (amakudari) into a lucrative job in a public corporation or private industry. Ultimately everyone must "descend" because of the implacable pres-

  *

  In MITI, for example, Abe Shinshichi, a former army paymaster who entered MITI service without taking the higher officials exam, rose to head the Vehicles Section in the Heavy Industries Bureau and ultimately became chief of the Shikoku regional bureau before retirement. Neither, however, is an important post. The Vehicles Section is avoided by career officers because it supervises bicycle and auto racing; it is said to be the only office in MITI with a regular subscription to the sports newspapers. During the last years of the occupation, criminal elements came to dominate bicycle racing in Japan; and after many public protests, the government turned bicycle racing over to MITI to clean up and to generate income from gambling at the tracks for public utilities and local finance. The Vehicles Section manages this; it should be distinguished from the Automobile Section in the same bureau, which is an important post. See Policy Review Company, ed.,

  Tsusan-sho*

  ,

  sono hito to soshiki

  (MITI: its personnel and organization) (Tokyo: Seisaku Jiho* Sha, 1968), pp. 2056.

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  TABLE

  5

  Relative Rates of Promotion by Entering Class (as of December 1, 1975)

  Ministry

  Vice- minister

  Director-general, external bureau

  Chief, internal bureau

  Deputy chief, bureau; or department head

  Chief, the three Secretariat Sections

  Chief, General Affairs Section in bureau or agency

  First ap- pointment, section chief

  Chief, regional bureau

  Finance

  1944

  1946

  19461948 (I)

  1948 (II)1950

  19511952

  19511952

  1958

  19481952

  MITI

  1944

  19451947 (II)

  1947 (I)1948 (II)

  1948 (II)1951

  1952

  19521953

  1961

  19491951

  Agriculture

  1945

  19451947 (I)

  19461948

  19481953

  19521954

  19531954

  1960

  19481951

  Transportation

  1943

  1946

  19461948 (II)

  1948 (I)1951

  1953

  19531955

  1961

  19521954

  Construction

  1944

  1945

  19451949

  19491952

  19511952

  19521953

  1958

  none

  SOURCE

  : Watanabe Yasuo, "Komuin * no kyaria" (Careers of officials), in Tsuji Kiyoaki, ed.,

  Gyoseigaku*

  koza*

  (Lectures on the science of administration), Tokyo, 1976, 4: 191.

  NOTE

  : The economic ministries recruited spring (I) and autumn (II) classes during 1947 and 1948 to meet their expanded duties under economic control.

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  sure from new entering classes advancing from below, and the usual retirement age for the vice-minister himself is slightly over 50. The practice is dictated by the rigid seniority system of the bureaucracy, but as we shall explain below, it has been turned to the advantage of the state as another very important channel of communication with the society.

  The process of separating out those who will resign early and those who will stay in the ministry is called

  kata-tataki

  (the tap on the shoulder) or

  mabiki

  (thinning out). It is the responsibility of the vice-minister and the chief of the Secretariat, who are also responsible for finding the soon-to-be-retired officials good new positions on boards of directors. The final weeding out comes at the vice-ministerial level, when one man from one class is chosen by the outgoing vice-minister as his own replacement and when all the new vice-minister's classmates must resign to insure that he has absolute seniority in the ministry. The new vice-minister in turn devotes his efforts to seeing that these high-ranking retirees (and fellow classmates) get good amakudari landing spots. New positions for retiring vice-ministers are found for them by the minister and by the ministry's elder statesmen (sempai).

  Competition in the maneuvering for high positions in a ministry normally occurs among classes and not individuals. For example, the 25 members of the class of May 1947 in the Ministry of Finance organized themselves as a club, the Satsuki Kai (May Club), which continued in amity for 31 years until 1978, when it had only one member left, Okura * Masataka, the director of the Tax Bureau.

  72

  Even if not formally organized as a club, a class will sometimes meet and caucus as a body during periods of stress within a ministry in order to agree on common policies (the various classes in MITI met separately in 1963, at the time of Sahashi's initial failure to be appointed vice-minister, one of the big crises in MITI history, which I shall describe fully in Chapter 7).

  Not every class can produce a vice-minister; if it did he could occupy the office for only a few months, which would greatly damage the effectiveness of a ministry's chief executive officer. Therefore, some classes have to be passed over. As a result of this factor, a chief of personnel in the Secretariat will sometimes attempt to remove promising members of rival classes from the competition in order to keep his own class in the running. Many of Sahashi's opponents have accused him of using his years as the personnel section chief to rig the succession. Whatever the case, the classes of 1935 and 1936, which lay between that of the outgoing vice-minister (1934) and Sahashi's own

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  (1937), found their members all occupying terminal positions. The "loser years" in MITI were 1935, 1936, 1938, and 1942.

  Each class has its "flowers" (

  hana

  )that is, candidates with strong credentials for the vice-ministershipand members of the class take pride in one of their comrades representing them at the top. For example, the

  ju-hachi-nen

  *

  gumi no hana

  (flowers of the class of 1943) at MITI were Sho* Kiyoshi, Yajima Shiro*, Miyake Yukio, and Yamashita Eimei. During 1973 Sho ended his MITI career as director-general of the Medium and Smaller Enterprises Agency, Miyake as director-general of the Patent Agency, Yajima as chief of the Heavy Industries Bureau, and Yamashita made it to the top as MITI vice-minister from July 1973 to November 1974. Needless to say, when one class produces two vice-ministersas happened twice in MITI (Ishihara Takeo and Ueno Koshichi*, both of the class of 1932, succeeded each other as vice-minister between 1955 and 1960; and Imai Zen'ei and Sahashi Shigeru, both of the class of 1937, succeeded each other as vice-minister between 1963 and 1966)great strains are imposed on the internal norms of ministerial life.

  Before the war age grading existed, but it w
as not as rigorously enforced as after the war. When Yoshino Shinji (class of 1913) became vice-minister of the Ministry of Commerce and Industry in 1931 (he served in that office until 1936), he was only 43 years old and was promoted over several of his seniors. Moreover, at his personal request, one of his seniors (Nakamatsu Shinkyo*, class of 1908) remained on in the ministry as chief of the Patent Bureau for another five years. Within MITI the practice of all classmates or seniors resigning when a new vice-minister takes over appears to have originated in October 1941, when Kishi became minister and appointed Shiina vice-minister. Kishi and Shiina represented the Manchurian faction of promilitary bureaucrats in the ministry, and they had very definite ideas of what they wanted to do. Kishi asked all of Shiina's superiors, with whom both had disagreed on policy, to resign, and they did so.

  73

  In the postwar world "respect for seniority" developed concomitantly with the tremendous expansion of the bureaucracy. It was needed to bring some definite order to the bureaucracy's internal personnel administration as well as to provide security for officials, who were significantly less well paid than before the war. As one measure of the bureaucracy's expansion, Watanabe calculates that whereas between 1894 and 1943 some 9,008 individuals passed the Higher-level (class A) Public Officials Examination, between 1948 and 1973 some 18,998 individuals did so.

  74

  Not all bureaucrats like or approve of the system of age grading and

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  forced early retirement. Sahashi has often denounced it as irrational, even though he was a past master at manipulating it. By the 1970's both the bureaucrats and the public were showing signs of irritation with the system. In 1974 an official rocked MITI by refusing to resign after he had been tapped and told it was time to go. Hayashi Shintaro *, spring class of 1947 and a Ph.D. in economics, had been chief of the Industrial Location and Environmental Protection Bureau for less than a year when he was asked to resign. Even though he had excellent job offers from private industry, he refused them on the grounds that his current work was important and that it was poor administration to change officials before they could even begin to be effective in their posts. Hayashi was liked in the ministry; he had become famous for developing the postwar Japanese sewing machine industry into a thriving export business, and he had served for several years in the JETRO office in West Germany, where he had studiedas MITI habitually puts it"how American capital overran the Western European economy."

  75

  His refusal to resign won praise from some younger MITI officials and from the press. Nonetheless, he was reassigned to the Secretariat with no work to do and took a cut in pay. Shortly thereafter he resigned and became vice-president of Jasco Corporation, a big chain of retail stores in the Osaka and Nagoya regions.

  In contrast to the views of Sahashi and Hayashi, Ojimi* Yoshihisa, a vice-minister, defends the system. He argues that strict rules of seniority and early retirement make Japan's top bureaucrats more youthful and energetic than those of other countries, and that because of their vigor they can generate more good new ideas. At the same time, the system of senior-junior (sempai-kohai*) relations, which extends beyond the period of bureaucratic service, ensures that their actions are watched by men with great experience.

  76

  It should be added that an additional result of the system of early retirement and subsequent reemployment in big business or politics is another link between a ministry and its main clients. The practice of bureaucratic descent from heaven thus generates one more kind of factional tie among the central groups of Japanese societyfactions based on financial considerations (zaibatsu, in the nonspecific sense of the term).

  As we have already seen, state bureaucrats in Japan retire early from government service and then obtain new employment in big business, public corporations, or politics. This practice is obviously open to abuse, and many Japanese commentators have charged that it has been abused. MITI reporters, for example, argue that a wise bureaucrat will use his years as a section chief to generate new ideas and put pressure on the business community to adopt them, but that as a

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  bureau chief he should become submissive toward the ministry's clients with a view to enhancing his own amakudari.

  77

  Misono* Hitoshi asserts that the combination of early retirement and inadequate pensions has made government service ''only an apprenticeship for favorable employment after retirement."

  78

  And Takeuchi Naokazu, a disgruntled former Ministry of Agriculture bureaucrat who quit and became active in the consumer movement, charges that the Budget Bureau of the Ministry of Finance has been known to increase the budget shares of ministries that were willing to find positions for retiring finance officers in the public corporations those ministries control, or among their clients.

  79

  Actual corruption among higher officials in Japan has occurred but is uncommon. In general, the Japanese public places greater trust in the honesty of state officials than in the honesty of politicans or business leaders. Such petty corruption as does occurgifts from businessmen, golf club fees, dinner parties, junketsis more common among noncareer officials than among the higher bureaucrats, and was more common in the period of shortages in the 1950's than in later years.

  80

  When such incidents do involve higher officials, the press and public are quick to condemn them. For example, charges of the misuse of public funds in several public corporations and efforts to apprehend the guilty were national causes célèbres during 1979 and 1980.

  81

  And the press and opposition parties are very watchful. The

  Mainichi

  , for example, reports that "toward the end of November of 1973, Nozue Chimpei, a member of the House of Councillors, conducted a unique study. He and his staff examined the trash cans at the construction and transport ministries to study how conservation policies were being carried out. After seven days of investigation, they found that the trash cans at the two ministries were filled with empty bottles of Johnny Walker and other expensive foreign liquor, and empty gift boxes bearing the names of senders."

  82

  The serious issue in Japan is not the occasional abuse of office by a higher official but a pattern of cooperation between the government and big business that may have unintended consequences. Throughout its modern history Japan has experienced a series of major governmental corruption scandals, the most famous of which are the Siemens case of 1914, the Yawata state steel works case of 1918, the Teijin case of 1934, the Showa* Denko* case of 1948, the shipbuilding bribery case of 1954, the Tanaka "money politics" case of 1974, and the Lockheed case of 1976. These are only the most sensational; numerous others have occurred, and four resulted in the fall of governments.

  83

  Less flagrant but possibly more important have been incidents of

  Page 69

  seeming wholesale payoffs by the government to business interests with preferential access or advance knowledge: the "dollar-buying scandal" of 1931, the payments to munitions companies immediately following the defeat in 1945, and the Bank of Japan's dollar-buying policies at the time of the August 1971 "Nixon shock" (in the face of certain knowledge that the yen would be revalued). On August 27, 1971, alone the government paid out some $1.2 billionsix times the amount involved in 1931to purchase dollars that had already been devalued on the rest of the world's foreign exchange markets. Total Bank of Japan dollar purchases in 1971 came close to $6 billion at ¥360 = $1 instead of ¥308 = $1; this represented a gift to business concerns of almost $1 billion. Some writers have called this "institutionalized corruption"; others have argued that it was the government's attempt to soften the blow for industries that would henceforth be selling their products at less advantageous prices.

  84

  The reemployment of retired government bureaucrats on the boards of industries currently designated as economically strategic also creates many opport
unities for hand-in-glove relationships. A classic case was the so-called Hakone railroad war of the late 1950's between two big private railroad systems, Seibu and Tokyu*. The issues involved the development of tourist railroads and bus franchises in and around the Mount Fuji area, a rail route from Ito* to Shimoda, and tourist boats between Atami and Oshima* Island. In every instance the Ministry of Transportation gave approval or issued licenses to Tokyu. The explanation of informed observers was that the president of Tokyu, Goto* Keita (18821959)one of the pioneers of the railroad, hotel, and department store businesses in Japanwas also a former official of the government railways and a minister of transportation in the Tojo* cabinet. The vice-president of Tokyu and president of the Tokyu*-backed Toei* Film Company was Okawa* Hiroshi, also a veteran of the Japanese National Railways. The executive director of Tokyu and also president of Tokyu Rolling-Stock Company was Yoshitsugu Toshiji, who had served in the old Railroad Ministry for more than twenty years. In addition, Karasawa Tsutomu, the Tokyu managing director; Kawahara Michimasa, president of the Tokyu-affiliated Keihin Rapid Transit Company; Torii Kikuzo*, vice-president of the Tokyu-affiliated Sagami Railroad Company; Shibata Ginzo*, president of the Tokyu-affiliated Hakone-Tozan* Railroad Company; Kajiura Kojiro*, president of the Tokyu-affiliated Enoshima-Kamakura Electric Railway Company; and Kawai Kentaro*, president of the Tokyu-affiliated Shizuoka Railway Company, were all former officials of the Ministry of Railways or its postwar successor, the Ministry of Transporta-

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  tion. It has been suggested that these "seniors" might have had some influence over the transportation officials who had to review Tokyu's * plans. Some incumbent officials might even have been thinking of entering the Tokyu* empire when they retired.