Summer Tangent: Economist.com summary of Amakudari system
For a Summer Tangent, here’s a good summary of Japan’s Amakudari system, and its effects on politics and prospects for reform. The Economist has come a long way from when I first read it back in the Eighties, when it basically assumed that Japan’s postwar economic miracle was due to theoretical economic efficiencies (as opposed to a closed captive domestic market and sweetheart-deal overseas trade access). Now they have people here on the ground (well, one that I’ve met, and I found him knowledgeable and impressive) who aren’t blinkered by mere Adam-Smithism and clearly know their way around. Good. Have a read. It’s short and sweet.
Economist: A SWATHE of high-ranking bureaucrats from Japan’s biggest ministries began in new posts on July 30th, doled out as part of an annual summer rite. A gaggle of even more senior ones were asked to retire—and immediately won cushy, lucrative jobs at quasi-public agencies and private foundations. Some were even sent to companies in industries they had previously regulated.
The practice is called amakudari (meaning “descent from heaven”). It has long reflected unhealthily close relations between bureaucrats and business, distorting the work of civil servants on the look out for a plum job, and burdening firms with the deadweight of ex-pen pushers serving as “senior advisers”. At its worst, it lets civil servants enrich themselves, pay back vested interests and resist economic reform. One reason why Japan’s banking crisis in the 1990s took so long to fix was because former senior staff from the finance ministry and Bank of Japan had moved to the banks that needed fixing. They pressed their former deputies to bail them out on soft terms, and then failed to carry out much-needed surgery…