In Defense of Japanese Bureaucracy

A HERETIC'S VIEW

American policy on Japan, especially during Asia's economic crisis, is based on five assumptions that have become articles of faith for most American policymakers, Japan scholars, and even a good many business executives. But all of them are either plain wrong or, at best, highly dubious:

1. The government bureaucracy's dominance is assumed to be unique to Japan, like its near-monopoly on policymaking and its control of business and the economy through "administrative guidance."

2. Reducing the bureaucracy's role to what it should be -- "the experts on tap but not on top" -- would not be that difficult. All that is needed is political will.

3. A ruling elite like the Japanese bureaucracy is both unnecessary in a modern developed society and undesirable in a democracy.

4. The Japanese bureaucracy's resistance to "deregulation," especially now in the financial sector, is nothing but a selfish clinging to power that will do severe damage. By delaying the inevitable, it can only make things worse.

5. Finally, the Japanese -- they are intelligent people, after all -- put the economy first, as we do.

The right assumptions about Japan, however, are:

1. Bureaucracies dominate almost all developed countries. The United States and a few less populous English-speaking countries such as Australia, New Zealand, and Canada are the exceptions rather than the rule. Indeed, the Japanese bureaucracy is a good deal less overbearing than that of some other developed countries, particularly France.

2. Bureaucratic elites have far greater staying power than we are willing to concede. They manage to keep power for decades despite scandals and proven incompetence.

3. This is because developed countries -- with the sole exception of the United States -- are convinced that they need a ruling elite, without which they fear social disintegration. As such, they cling to the old elite unless there is a universally accepted replacement, and no such replacement is in sight in Japan.