Chalmers Johnson - MITI and the Japanese miracle

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However, the quality of the EPA's main product, the annual Economic White Paper, has been affected by its colony status: in 1970 MITI prevented it from saying that the Yawata-Fuji steel merger (which produced New Japan Steel) could lead to monopolistic price increases, and in 1971 the Finance Ministry stopped any mention of the inflationary effects of the Bank of Japan's dollar buying following the Nixon shocks.

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The Defense Agency illustrates a different facet of the struggle for the outposts. Japan's postwar armed forces originated late in the occupation era as the National Police Reserve Force; in 1954 the Police Reserve was expanded, placed under the newly created Defense Agency, and renamed the Self-Defense Forces. In the same year a new national Police Agency was established. Since the civilian leaders of the Police Reserve had come from the old Home Ministry line of descent, and since the new Police Agency inherited the old Home Ministry's national police functions, it was natural that the Police Agency should continue supplying the civilian bureaucrats to staff the new Defense Agency. The first chief of the Police Reserve and the first vice-minister of the Defense Agency was Masuhara Keikichi, who held the post from August 1952 to June 1957. Masuhara was an old Home Ministry bureaucrat (Todai * law, 1928; chief of the Yamagata prefectural police in 1940). The top positions in the uniformed service of Japan's new armed forces went to former military officers, but until the 1970's all the top Defense executive positions were held by Police Agency transferees.

However, the Police Agency ran into trouble holding on to its bureaucratic turf because its predecessors did not recruit many new officials during the key class years of 1948 to 1952. The Ministry of Finance, on the other hand, took in about 50 successful examinees in 1947 and 1948 each, and from 40 to 50 during each of the years 194953. By the middle of the 1970's the Finance Ministry was under heavy pressure to find positions for some of these now high-ranking officials, and the Defense Agency looked promising. In June 1974 the Finance Ministry finally succeeded in placing Tashiro Kazumasa, formerly of the Finance Ministry's Secretariat, as the vice-minister of defense. Even though defense issues were becoming increasingly important to the Japanese during the 1970's, the Defense Agency itself was preoccupied by the Police-Finance struggle. The real losers in this fight, as at the EPA, were the pure defense bureaucrats, those who went to the Defense Agency directly from the university.

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MITI maintains a modest but choice portfolio at Defense: it controls the chief of the Equipment Bureau position and the main defense equipment section. The Welfare, Postal Services, Labor, and Foreign Affairs ministries also have one or two section chief positions under their control in the Defense Agency.

The case of the Environment Agency (Kankyo-cho*), set up in 1971 after the famous "pollution Diet" of 1970 had greatly strengthened the environmental protection laws, is a classic of the established ministries staking out claims in newly opened-up territory. The Environ-

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ment Agency's staff was fixed initially at 500 officials, and some twelve different ministries and agencies supplied them. The Welfare Ministry headed the list with 283, then Agriculture with 61, MITI with 26, the Economic Planning Agency with 21, and so forth. The fighting over the leadership posts was fierce. Welfare won it when the vice-minister of Welfare himself transferred to the new agency as its vice-minister. Welfare also captured two bureau chief positions and the position of chief of the Secretariat. Finance and Agriculture split the two remaining bureau directorships, and MITI got only a councillor's slot (

shingikan

). Of the 21 sections in the Environment Agency, Welfare names the chief of 7, MITI 3, Economic Planning and Agriculture 2 each, and Finance, Construction, Home, Labor, Police, Transport, and the Prime Minister's Office 1 each.

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Watanabe notes that ''this pattern is true for all newly created agencies."

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The struggle for nawabari (literally, "roped-off areas") is one of the passions of the Japanese bureaucracy. However, this may well be one of the hidden, if unintended, strengths of the Japanese system. As Hollerman argues, "If 'the government' of Japan were actually a highly coordinated set of agencies, its powers could be applied with overwhelming force. Instead, partly as a result of sheer ambition for status and partly as a result of divergent interests within the society itself, there is intense rivalry and jealousy among the ruling agencies and their personnel. In competing for power, they tend to neutralize one another's authority to some extent."

107

On the other hand, Sakakibara, himself an ex-bureaucrat, defends what he calls the vertical organization of the bureaucracy because of the discipline and solidarity it instills in officials. Rather than committing themselves to some abstract ideal, they join a "family" when they enter an old-line ministry. Given its semilifetime employment system and its vertical organization, each ministry must create sufficient public corporations, affiliated associations of clients (

gaikaku dantai

), and colonial outposts for its retired and soon-to-retire seniors. These commitments cause a ministry to become a "welfare community," which in turn becomes an object of affection for its members and not merely an impersonal office.

108

Efforts at administrative reform in Japan have occasionally produced a reduction in personnel or the abolition of a grossly superfluous unit, but they have never affected the vertical structure.

MITI itself, as the descendant of one of the original ministries dating back to 1881, is certainly a "welfare community," but it also has several characteristics that distinguish it from the other economic bu-

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reaucracies. It is the smallest of the economic ministries in terms of personnel, and it controls the smallest share of the general account budget. This last feature is important because it frees MITI from the commanding influence of the Finance Ministry's Budget Bureau, which all the other ministries must cultivate. MITI exercises control over money through its ability to approve credit or authorize expenditures by the Japan Development Bank, the Electric Power Development Company, the Export-Import Bank, the Smaller Business Finance Corporation, the Bank for Commerce and Industrial Cooperatives, the Japan Petroleum Development Corporation, and the Productivity Headquarters, all of which are public corporations that it controlsor in which its views are decisive.

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Although MITI's official budget in fiscal 1956, for example, was only ¥8.2 billion, the MITI Press Club concluded that the ministry actually supervised the spending of some ¥160.9 billion.

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MITI's internal pecking order is different from that in other ministries. Although most of its vice-ministers have served as chiefs of one of the sections in the Secretariat, the Secretariat itself is not the final spotor "waiting room" (

machiai-shitsu

)for the vice-ministership, as it is in other ministries. The internal MITI rank order is as follows:

1. vice-minister

2. chief, Industrial Policy Bureau (before 1973, the Enterprises Bureau, which was created in 1942)

3. director-general, Natural Resources and Energy Agency