Tuesday, February 3, 2009

Can the LDP — or anyone — eradicate amakudari?

The Aso government, looking to hasten the passage of the FY2009 budget (the third stage of Prime Minister Aso's plan to overcome the recession), has promised to accelerate the timetable for introducing the ban on the practice of amakudari and the related practice of watari, whereby a retired bureaucrat wanders to other employers who might have inappropriate ties with his former ministry. The government will concurrently hasten the creation of a new organization that will help retiring bureaucrats find jobs.

Clearly Mr. Aso is trying to head off criticism from multiple directions: reformists within the LDP, former LDP administrative reform czar Watanabe Yoshimi, and the DPJ.

Economist Ikeda Nobuo dismisses as "make believe" the idea that the government can simply decree an end to amakudari.

Ikeda makes the astute point that one cannot simply decree the end of amakudari, because the problem is intertwined with a range of problems relating to the nature of the bureaucracy and the labor market. How, he wonders, are fifty-something ex-bureaucrats — despite their management experience and (presumably) advanced degrees — supposed to find jobs on their own in the labor market as it exists today? What company is hiring senior managers in their fifties, unless it entails providing a sinecure in exchange for the ex-bureaucrat's connections and knowledge? At the same time, both the LDP and the DPJ are on record as wanting to cut waste, which in practice means dissolving the semigovernmental corporations that absorb a good number of ex-bureaucrats. If the private sector cannot gainfully employ them, and if there are fewer semi-public or public sector jobs available, where exactly will these still-useful ex-bureaucrats go? Foreign companies?

One way to ease the pressure on the system is by having more bureaucrats retire earlier. Takahashi Yoichi, formerly of the finance ministry and now one of its biggest critics, and Eda Kenji, formerly of METI and now an independent Diet member collaborating with Mr. Watanabe, have been promoting precisely that, with their 脱藩官僚会 (dappan kanryo kai). Based on the example of the bakumatsu, when samurai voluntarily left the service of their daimyo, their idea is to encourage bureaucrats to retire early and put their policy expertise to work for the whole of Japan, as a means of encouraging the transfer of power away from the bureaucracy. Incidentally, Mr. Eda calls for the same combination of cutting waste and banning amakudari, meaning he better get to work recruiting dappan kanryo. (He explains the group here.) Clearly, however, these changes will not be enough. It may take the bureaucracy introducing merit-based promotions, which in turn will require that incoming bureaucrats receive more education before entering their ministries instead of devoting the first several years of their careers to training.

Of course, there is a whole different set of problems assuming it were even possible for companies to hire mid-career ex-bureaucrats as managers with ease. The US government is, in a sense, engaged in an ongoing struggle to prevent retired civil servants from abusing their former positions. A whole range of institutions — departmental inspectors general, the government accountability office (GAO), the Justice Department's public integrity section, the office of government ethics, and so on — is engaged in the hard work of investigating and punishing abuses of office by current and former government employees.

The laws are fairly clear. Former employees are legally proscribed from representing a third party with government agencies on any matter in which involvement was "personal and substantial." Some high level officials are subject to a "cooling off" period, a one-year period during which any attempt to contact their former employers with "the intent to influence" an official decision is forbidden. "Very senior" employees are banned from contacting senior executive branch officials and employees of their former agency for a year. Naturally it is worth asking what happens after the cooling off period, because Japan also has laws mandating cooling off periods. The difference, it seems, is not a matter of law, but a matter of enforcement.

As the Global Integrity Report on the US found, the US government has more work to do on policing ties between former bureaucrats and their employers. But the point is not that the US is perfect — far from it. Rather, the US government has made a point of trying to root out this behavior. It has developed a number of organizations with the explicit purpose of keeping these corrupt ties in check. And despite that, it still has a hard time policing ties between retired civil servants and their former agencies, especially, I would argue, in matters of defense (Eisenhower's defense-industrial complex).

In other words, it is not enough to declare amakudari at an end and offer to assist retiring bureaucrats with finding new employment. Is this government prepared to create new institutions to police ex-bureaucrats and the government's ministries and agencies? Is it ready to protect whistleblowers? Is it prepared to create and nurture a whole new agency whose explicit purpose is policing the rest of the bureaucracy? Uprooting amakudari will require a government-wide commitment to eradicating the practice. It will also require Diet oversight.

Naturally the same challenges apply for the DPJ, which has made cutting waste its top promise for the next general election.

Unlike Nakagawa Hidenao, who continues to impugn the DPJ's reformist credentials based on the slightest of pretenses, I believe the DPJ is serious about administrative reform. I recently talked for an hour with Nagatsuma Akira, the man responsible for exposing the pensions scandal and a currently a member of the DPJ's "Next Cabinet" as minister responsible for pensions. Mr. Nagatsuma is passionate about administrative reform, seeing it, correctly in my view, as essential for democracy. He is positively bursting with ideas for reform., with a zeal unmatched by any Japanese politician I have ever met. He believes in the importance of accountability. His zeal, I think, is representative of how the DPJ will govern.

But zeal or no zeal, the DPJ will still have to find a way to navigate through this treacherous minefield, with the additional challenge of the party's ties with public-sector unions. I still have hope for the DPJ, but I am not blind to the difficulties it faces on this fundamental issue.

For now, simply declaring an end to amakudari is nothing more than a publicity stunt. (Ikeda, more generous than I, calls it a first step, which I suppose is true but that presumes that this government is prepared to take the aforementioned next steps.)

1 comment:

Janne Morén said...

I may be way off here (I usually am), but isn't the problem that civil servants retire too early?

They get kicked out in their late fifties or at 60 at the latest, when they're still too young to lift a regular pension - and in many cases undoubtedly still too young to want to retire. They need to fill that 5-8 year gap with something in order to make a living until retirement, to fill their pension accounts, and to have something worthwhile to do.

So why not just set their retirement age to be the same as for everyone else? If they want the full benefits, they work until 65, then go straight to lifting their pension. No need for a sinecure and so no need for amakudari.