Japan from the inside out

The day datsu-kanryo disappeared

Posted by ampontan on Friday, June 11, 2010

“Politicians in Japan are weak, you know? The bureaucracy has to be strong in a country such as this.”
– former Prime Minister Fukuda Yasuo to reformer Watanabe Yoshimi of Your Party

THERE WERE hundreds of glowing reports in the print and broadcast media last week about Kan Naoto’s replacement of Hatoyama Yukio as prime minister of Japan. It’s only natural for the media to do what it considers its job and inform people about a change in the politicians who control the Japanese government.

What’s missing from those media reports is that many–if not most–Japanese have other ideas about who really controls the national government. They look instead to the national bureaucracy, collectively known as Kasumigaseki from the district in Tokyo where many of the ministries are located.

Included in that group are the nation’s civil servants themselves.

Veteran journalist and editor Hasegawa Yukihiro describes how things really work in his award-winning book, Nipponkoku no Shotai (The Real Face of the Japanese Nation). Mr. Hasegawa explains that the Kasumigaseki bureaucrats believe that their authority is permanent, the authority of politicians is temporary, and that their behavior is derived from that belief. That behavior very much resembles the operations of a political party in power in a Western country.

They formulate policies on their own initiative and draw up detailed briefing papers to promote those policies. The briefing papers include Q-and-A sections in which possible objections to those policies are raised and rebuttals to those objections provided. The papers are distributed to ministry personnel, enabling them to speak in one voice to outsiders. Some are given the assignment to promote those policies among individual Diet members, and Mr. Hasegawa says they can be seen prowling the halls of the Diet office building every day. Their job is to sell the policy proposals to politicians who haven’t taken the time or trouble to master the details themselves.

They also manipulate the mass media, particularly those in the print media, and use exclusive information and the promise of scoops to cultivate reporters. Mr. Hasegawa says—not suggests, says—that the job performance evaluations for personnel at some civil service levels are determined in part by one’s success in getting favorable stories planted in newspapers. Most of the legislation presented in the Diet for debate has been created and written by bureaucrats who sold it to the ruling party. The terms of the Diet debate have been staked out in advance, and most of the work is finished by the time the actual “debate” starts. When the Liberal Democratic Party was in power, some of the advance work was done by zokugiin, Diet members affiliated with individual ministries who functioned as something akin to legislator lobbyists. (There were exceptions. Koizumi Jun’ichiro was the first to effect a meaningful change in this system, but the process of rolling back his achievements started under Fukuda Yasuo.)

There are other ways in which the civil servants are more politician than servant. They actively work against people who oppose their policies and play serious hardball with those who get in their way. For example, it’s been openly charged that after then- Prime Minister Hashimoto Ryutaro told the Finance Ministry of his decision to spin off the Finance Department into a separate agency, the Ministry leaked to the press that Yamaichi Securities, the third-largest broker in the country, had gone finally gone bankrupt after years on life-support. That was followed by a massive credit crunch. Mr. Hashimoto’s LDP was trounced in the upper house election, and the Cabinet resigned.

Your Party head and former Government Reform Minister Watanabe Yoshimi told Mr. Hasegawa that bureaucrats threatened to bring down a Cabinet of which he was a member (he served in both the Fukuda and Aso administrations) if he continued his efforts to reform the civil service.

It signaled the beginning of the end for the Abe administration when the Social Insurance Agency retaliated against his measure to privatize the agency by leaking the news that government workers had mishandled and lost the payment records for millions of national pension accounts.

Mr. Hasegawa sees Kasumigaseki as representing all the problems with modern Japan. He writes:

I suspect the bureaucratic mechanism of Kasumigaseki is a portrait of Japan in miniature. That’s the sense I’ve developed from my association with bureaucrats. Honne and tatemae (one’s real beliefs and what one says in public), making a distinction between actions for public consumption and those taken behind the scenes, an emphasis on precedent, a vertical society based on seniority, an awareness of the importance of controlling one’s turf, in which individuals will say nothing about other (sectors) while allowing no one to say anything about theirs…the more I observe the “statutes of Kasumigaseki”, the more I think of it as Japanese society itself.

That’s because the history of Kasumigaseki began with the modernization of Japan itself in the Meiji period. After repeated trial and error, they’ve developed both the form and content. By formulating budgets, debating policy, and proposing laws, Kasumigaseki has created the shape of the nation that is Japan. If that is the case, it is no exaggeration to say that the rules, customs, traditions, and culture that have been put in place and fostered by Kasumigaseki are Japan itself.

The most powerful of the ministries is the Finance Ministry, and the power in that ministry resides in the Budget Bureau, which controls the national purse strings. Mr. Hasegawa also wrote:

The real issue is, ‘What is the real objective of the Finance Ministry?’ The conclusion I reached (after serving on government panels) was that their real objective was tax increases. Achieving that involved the seeming contradiction of not objecting to spending increases. In 2006, when a large increase in tax receipts was projected, the ministry played a tag team match with the Ministry of Economy, Trade, and Industry to come up with a scheme to use JPY 2 trillion (about $US 21.87 billion) in the supplementary budget from these tax receipts to keep the possibility of a tax increase alive.

There’s no mystery in the Finance Ministry’s motivation in lobbying for tax increases–it’s a way to increase their power. The more money that flows to the central government, the more power they have.

A political movement has emerged calling for datsu-kanryo, or roughly, disassociation from the bureaucracy. This is the rallying cry of Your Party, formed last August by Mr. Watanabe, who broke with the LDP over the unwillingness of party leadership to back his reforms, and Eda Kenji, formerly of METI and a long-time independent MP. The remaining Koizumian wing of the LDP, led by Nakagawa Hidenao, champions the same cause. The idea has so much resonance with the public that the DPJ itself copped the datsu-kanryo slogan during its election campaign last year.

Until they won. Then, they quietly changed the slogan to datsu-kanryo ison, or disassociation from a reliance on the bureaucracy. Former Finance Ministry officials were appointed to important positions in the Hatoyama Administration, including the head of the to-be renationalized Japan Post—whose funds from savings accounts and insurance policy will again be the source of money for purchasing deficit-financing government bonds.

There were hundreds of glowing reports in the print and broadcast media about the high-profile policy and project reviews the Hatoyama administration began last fall. Sengoku Yoshito, now the Chief Cabinet Secretary, suggested that Edano Yukio, now the party secretary general, and first-term upper house member Ren Ho, a former model and TV announcer and now the Minister for Government Reform, act as masters of ceremonies for the televised event in which they forced bureaucrats to justify their programs and expenditures, and recommended the elimination or reduction of some of them.

What’s missing from those reports is that the entire process was stage managed by the Finance Ministry’s Budget Bureau. Recall that Mr. Hasegawa wrote about actions in public and behind the scenes, and how the bureaucrats had everything planned in advance. Label this Exhibit A. The Budget Bureau selected all the programs to be examined and made recommendations on those which should be eliminated—in advance. Ren Ho is an experienced reader of scripts.

What’s also missing from those media reports is that the televised proceedings had no legal standing whatsoever. There’s no business like show business. The Budget Bureau compiled the current budget last December, as it always has. In at least one instance, they reinserted cuts made by the Edano-Ren Ho Show from the Ministry of Education for IT in the classroom into the budget for the Ministry of Internal Affairs and Communications.

It was as if a fox sat at the door of the hen house with a can of beer in his paw telling the farmer which hens he would be allowed to take with him.

Mr. Hasegawa explained in the 23 January issue of the weekly Shukan Gendai that part of the ministry’s motivation was a bureaucratic turf battle:

The Finance Ministry initially welcomed the inauguration of the Hatoyama administration. That’s because it provided them with the chance to cut as much as they could from the untouchable parts of the budgets of the Land, Infrastructure, and Transport; Agriculture, Forestry, and Fisheries; and Health, Labor, and Welfare ministries that they had been unable to cut due to the opposition of the powerful zokugiin when the LDP was in control. In fact, the policy review was the perfect chance to cut some of it, and they gloated over their victory.

Kinoshita Toshiyuki worked for the Ministry of Agriculture, Forestry, and Fisheries for 15 years, served as the mayor of Saga City, and now heads his own policy research group. He is also the author of Naze Kaikaku ha Kanarazu Shippai Suru no ka (Why Reform Will Never Succeed), a title meant as a challenge rather than a lament. He said in an interview:

The DPJ has to be closely watched for how much reform it will bring to Kasumigaseki because it receives so much support from public sector unions.

He added that when he was hired by the Agriculture Ministry, he was told:

‘Cabinet ministers are performing monkeys. Your job is to skillfully beat the drum and make them dance.’ That is the presumption of the civil service. There has been no change to the general rule that the politicians do not become involved in policy formation, a role taken over by the bureaucrats.

Both he and Mr. Hasegawa say that power struggles, either with politicians or with other ministries, are what they really are about. Mr. Kinoshita claims that if the politicians were in fact interested in ferreting out wasted tax money, it would be easily accomplished by reworking the nation’s personnel system into something resembling those in place in the private sector.

There were hundreds of glowing reports in the English-language print and broadcast media explaining that the new members of the Kan Cabinet are “fiscal reformers”. Whether through political sympathy, linguistic ignorance, or the desire for shorter headlines, they have adopted the wrong word. The phrase the Japanese commonly use in this context is “fiscal reconstruction”.

What those reports also fail to mention is that “fiscal reconstruction” is Japanese media code for “tax increases”. Perhaps someone in a Kasumigaseki office helped lighten the journo load by coining a convenient euphemism.

Mr. Kan, Mr. Sengoku, and other recent Cabinet and party nominees are in favor of “fiscal reconstruction”. Mr. Kan wants a higher consumption tax and a more “progressive” income tax because he thinks this will lead to higher growth. He must think it, considering how often he talks about it. These are natural positions for a long-time social democrat, but they became more public and more pronounced after his appointment as…Finance Minister!…in January despite having as much expertise in economic and financial matters as the average convenience store clerk.

Not to worry. The ministry has decades of experience in housebreaking new lapdogs.

Writes Your Party Secretary-General Eda Kenji:

The mass media has been cheering the new DPJ government, but that’s the way it always is. It’s a Pollyanna-ish, carefree country (notenki).

No one in the media has pointed out that the Cabinet has been completely absorbed by the Finance Ministry. Try going out for a drink with some Finance Ministry bureaucrats and listen to what they say: “It was as easy as twisting a baby’s hand.” “It really was easy to do—Neither Mr. Kan nor Mr. Noda (the new finance minister) have any knowledge or experience of the economy or finance.”…

For more than 10 years, the Finance Ministry has been pushing the queer logic that the economy would improve with tax increases, and now it comes naturally out of both their mouths. There won’t be any future for this administration.

What the glowing reports also fail to mention is that Sengoku Yoshito, whom Mr. Kan said would be the axis on which his Cabinet rotates, is the leader of a Diet group affiliated with Jichiro, the nation’s local government employees’ union (see right sidebar). Jichiro’s 21st Century Declaration includes the pledge to work to defend and expand public services.

According to a book by Kitami Masao, public sector salaries in Japan are 40% higher than private sector salaries. Can Mr. Sengoku be expected to look in that direction to contribute to Japan’s “fiscal reconstruction”? Or is the key man in the Kan Cabinet a major part of the problem rather than part of the solution?

The front page of this morning’s Nishinippon Shimbun, which is usually sympathetic to the DPJ, carried the first part of a new feature series titled, The Day Datsu-Kanryo Disappeared. Here are some excerpts:

Hatoyama did not have a monopoly on ‘disassociation from reliance on the bureaucracy’. In 1996, when the scandal arose over the cover-up of the infection of hundreds of patients by AIDS-tainted blood transfusion products, Kan sat at his word processor, typed out a ‘minister’s directive’, and thrust it into the face of senior officials in the bureaucracy. Fighting the bureaucracy was Kan’s point of origin.

But an aide says, ‘He realized that the bureaucracy is something to be mobilized and used’ after becoming Finance Minister. At his first Cabinet meeting on the evening of the 8th, he said, ‘Leadership by the politicians does not mean eliminating the bureaucracy.’ In that instant, it was apparent that the notorious realist had undergone a change of heart.

Here’s what he says now: “In regard to the approach of each government agency, I intend to tell them, if necessary, ‘Wouldn’t it be better if you did this?’” This is the man who once wrote: ‘Democracy is a dictatorship in which the leaders can be replaced.’

The Kan administration has applied the brakes to datsu-kanryo. They’ve won initial public support, but there are still many unknowns…The Hatoyama-Ozawa regime that turned the hopes for a change in government to disappointment has been brought down, but will there be true progress in removing their politics from the new administration?”

In an interview in the latest edition of the monthly Bungei Shunju, Watanabe Yoshimi says the DPJ has turned out to be a “grotesque clone” of the LDP.

Well, they’re not all grotesque. A former model, Ren Ho looks quite attractive in her trademark white suit. There are hundreds of glowing reports in the media describing her as a “firebrand reformer” grilling bureaucrats and hunting for wasted tax money like a heat-seeking missile.

But what they fail to mention is what you already know—that she was working off a Finance Ministry script.

It would be churlish of me to suggest that she was just another performing monkey in the DPJ government dancing in a routine choreographed by the Kasumigaseki bureaucrats, as Mr. Kinoshita had it.

But you can draw your own conclusions about that.

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4 Responses to “The day datsu-kanryo disappeared”

  1. Tony said

    Insightful reading of the tea leaves again. Thanks

  2. The rest of us simply cannot understand why the people of Nippon still buy gov debt.

    Is it simply because there is no other way?

  3. PaxAmericana said

    Thanks for this informative article. It is said that the bureaucrats ruined China back in the 1400’s. It certainly appears as if a total crisis will be required to achieve much change.

  4. The Chinese had a way of reducing competition for loyalty: castration. Only a eunuch had true power. Now it might only be necessary to vasectomize. Except cellular techniques allow offspring in a test tube!

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