Michael R. Finstad (University of Southern California, USA)
In a recent article entitled, "Abe's Reform Drive a Battle with Deeply Rooted Bureaucracy", Masahiko Ishizuka discusses the ongoing Japanese practice of amakudari. Amakudari, which translates into English as "decent from heaven", is a tradition which has allowed aging bureaucrats to transition from civil service to high-paying positions in the private sector. In fact, as Ishizuka points out, these private firms are "effectively forced to accept" these bureaucrats. The reason for this is because bureaucrats, who control firms via regulations and laws, need a place to continue working when they themselves are forced to retire from their ministry. Moreover, firms also stand to benefit, because having a former official around can secure favorable treatment from the bureaucracy. This practice has gone on for decades, and used to be unquestionably condoned.
However, several issues have arisen in recent years, most notably bid-rigging on public projects and bureaucratic corruption. These issues have prompted many policy-makers, such as former Prime Minister Koizumi and current Prime Minister Abe, to devise policies that will help to eliminate the practice of amakudari. The most current reform measure being proposed, which Ishizuka deems a necessary step towards phasing out this practice, is the creation of a job-placement agency for bureaucrats. Essentially, the plan would prohibit ministries from placing their bureaucrats at companies under their jurisdiction, and the process would be protected from the influence of the respective ministry. In an economy such as Japan's, with relatively high unemployment and many jobs being outsourced, the problem of amakudari can potentially exacerbate recessionary symptoms. So there can be little doubt that a policy attempting to alleviate the problems of corruption and unethical behavior is needed. The proposal for a unified job-placement agency, however, is very problematic in a number of ways.
To begin, as many critics have correctly pointed out, the policy will not eliminate bureaucratic influence. This is because there are still loopholes in the language that bureaucrats can exploit. For example, the ministry will be allowed to "cooperate with the center" by giving it information about their officials. Because it dictates what information is given about a certain individual, this effectively means that the ministry can still influence the job-placement process. In addition, the job-placement center can also be subjected to review after a certain period of time. Thus, the center's existence may be sustained indirectly through bureaucratic approval, giving ministries another avenue for exerting their influence. However, these are just a few of the practical problems with this proposal. There are also, perhaps more importantly, a couple of theoretical problems that need to be addressed.
First, it is almost impossible for any policy to completely eliminate the conflict of interest that arises between government and the private sector. The ethical problems raised by the practice of amakudari are, in fact, very common concerns. This sort of thing happens all the time, even in countries with stringent rules governing civil servants entering into the private sector. For example, the United States has made very specific laws, including the Civil Service Act of 1978, to discourage the conflict of interest raised by public officials working in the private sector. Yet questions have been raised in the last few years regarding Vice President Dick Cheney and Halliburton Energy Services, a multinational corporation Cheney was CEO of before becoming Vice President in 2001. Throughout Cheney's public service, he has maintained extensive ties with Halliburton, and many believe this is the reason for the company millions of dollars worth of government contracts, especially for projects that arose out of the Iraq War. So despite federal legislation in the US, concerns over ethical conduct still persist. Therefore, in Japan's case, it seems that any policy falling short of banning civil servants from the private sector after their public service will result in more of the same problems they currently face.
Secondly, it also seems that the success of passing this policy, especially in the near future, will be extremely difficult. This is because any kind of policy which threatens the tradition of amakudari is likely to be met with fierce opposition from both bureaucrats and private sector firms. As Ishizuka's title points out, the practice is deeply rooted in Japan. Obviously, current bureaucrats want to make sure they continue to benefit from amakudari, which means they will oppose most measures of reform. Firms, particularly those with former bureaucrats, will also oppose most measures to change the practice, as they want to continue their economic domination of government contracts. This hegemony cannot exist without maintaining the firm's influence with the bureaucracy, and continuing the amakudari tradition. Clearly, both of these interests have a stake in upholding the status quo, and altering this relationship will require much more than creating a single job-placement agency.
There should be no doubt that changing the ethical problems associated with the tradition of amakudari in Japan is becoming increasingly necessary. Indeed, the practice has led to widespread bid-rigging and bureaucratic corruption. Unfortunately, Prime Minister Abe's current proposal for a unified job-placement agency does, in fact, lack the depth necessary for changing the stubborn relationship between government and the private sector. In addition to its practical problems, the proposal also has a couple of theoretical implications. First, there is no policy that can completely eliminate the conflict of interest that arises out of allowing government officials to transition into the private sector. So, basing an argument in favor of this policy on the theoretical assumption that reform will succeed in getting rid of bureaucratic conflict of interest is simply utopian. Secondly, even if many accept this rhetoric, the policy is very likely to be repeatedly voted down due to the strong influence bureaucrats and private-sector firms have on policy makers. If Japan truly wishes to rid itself of this long-standing tradition, it must do more to address these issues. And policy makers need to realize that any proposal for reform which does not address these deeper issues is bound to operate in shallow territory.
Ishizuka, Masahiko "Abe's Reform Drive a Battle With Deeply Rooted Bureaucracy" Glocom Platform Opinions May 1, 2007.
Marcus, Michael "Regulatory Transparency in Japan: Half Full or Half Empty?" Asia Perspectives Vol. 3 No. 2, March 2001 pp. 20-22.
Nakata, Hiroko "Amakudari Too Entrenched To Curb?" The Japan Times May 29, 2007.
Nakata, Hiroko "Amakudari Crackdown Called Toothless, Poll Ploy" The Japan Times April 14, 2007.