Reining in Japan’s Bureaucracy

March 2nd, 2011By Category: Uncategorized

Eighteen months ago, the Democratic Party of Japan won a landslide victory under the leadership of then-party leader Yukio Hatoyama, ousting the LDP from power after nearly fifty four years of rule. After botching talks with the United States in an attempt to relocate MCAS Futenma, Hatoyama resigned after a mere ten months. He was replaced by party veteran Naoto Kan – an individual many believed would bring change to the Land of the Rising Sun. Unlike the political blue bloods, Kan was a self-made man, who was better equipped to relate to the general public and bring about change through popular and political support.

Fast forward eight months, and it becomes evident as to how wrong they were. A recent poll by TBS revealed that only one out of every five Japanese support the beleaguered politician. Critics are calling him indecisive, while internal strife in the DPJ is threatening to tear the bulk of his propositions apart. With political opponents calling for his resignation and a snap election looming in the horizon, Kan is set to become another victim of Japan’s conveyor belt political system and endless political deadlock.

The calls for Kan’s head, however, are only a symptom of a larger underlying issue. Many in Japan have grown sick of the petty squabbling at the government offices in Nagatacho, and are frustrated by the lack of decisive government action in resolving the problems of the financially stricken country. With a debt to GDP ratio approaching, if not exceeding two hundred percent, little to no economic growth and a population aging faster than any other in the world, timidity and political discord are the last things Japan needs. So what is the country to do?

Fire the bureaucrats.

Though politicians are partly to blame, unelected public servants in Japan are equally guilty – but not equally responsible – for the country’s continued socioeconomic stagnation. In Aki Wakabayashi’s “The Bizarre World of the Public Servant”, Wakabayashi reveals the obscene amount of waste that goes on in various departments of the Japanese government. Budget surpluses, for instance, are used to purchase wine and champagne in the Ministry of Foreign Affairs. Officials live in housing at little to no cost to them, and many put expensive trips abroad on the government’s tab under thinly veiled excuses. The average bureaucrat makes nearly double the average salaryman’s income (¥7 million); gets a retirement allowance of approximately ¥27 million and begin utterly useless yet needlessly expensive pork barrel projects. There’s a bonus for having children, a bonus for not having children (irony at its finest), a bonus for travel, a bonus for not getting promoted, a bonus for working with the unemployed and a general bonus for all public employees regardless of Japan’s economic condition. The Japanese bureaucrats have enjoyed a superfluity of benefits over the years that the Japanese government can simply no longer afford to maintain.

The cost, however, is only part of the problem. Japan’s bureaucracy wields an enormous influence over policymaking – greater than that of any political party, including the LDP. In the words of University of California, San Diego professor Chalmers Johnson, “the elite bureaucracy of Japan makes most major decisions, drafts virtually all legislation, controls the national budget and is the source of all major policy innovations in the system.” Unfortunately, however, such “policy innovations” have been unable to bring Japan back to economic growth since the asset price bubble burst more than twenty years ago. Rules and regulations established by the ministries stifle entrepreneurship and foreign investment – two potential sources of economic growth that Japan has yet to tap into. And let’s not forget the fundamental issue at hand: with bureaucrats controlling much of Japan’s affairs, the country’s political system is a mere shell of democracy, and things are unlikely to change for the better regardless of the party in power.

Laden with wasteful spending and a chokehold on political power, it’s clear that reform must come to Japan’s bureaucracy. It’s just a matter of time before someone takes a stand to say that enough is enough.

Photo credit: World Economic Forum / Flickr

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