The Route to Heaven-on-Earth

Abstract

Amakudari (‘decent from heaven’) is a primary component in Japan Inc. Amakudari began informally during the 1930s when the government started to strictly regulate the economy for the war effort. Business owners employed bureaucrats in order to determine future government directives as well as to lobby interests. It was widely believed in the 1970s and 1980s that the interlocking relationship between business, the bureaucracy and politicians was the secret to Japan’s success in global markets. The system seemed to work well while Japan was emerging industrially. However, what was not generally recognized was how the interlocking relationships created a mutuality of vested interests of the stakeholders, a very insular environment that protected domestic businesses from foreign competition and a rigid system of ministerial administration of the economy, a model that would consequently impede the efforts by successive administrations since the 1990s to implement structural reforms. Although the practice has been regarded as encouraging corruption and sloppy regulation, it was not until the beginning of the 1990s after the asset-inflated bubble burst and scandals emerged involving amakudari and the ministries’ collusion with companies in their administrative jurisdiction that amakudari was no longer condoned.