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Monday, April 21, 2008

SENTAKU MAGAZINE

Is Japan's bureaucracy still living in the 17th century?

The roots of both the Japanese and French bureaucratic systems can be traced to Jean-Baptiste Colbert, who as controller general under "the sun king" Louis XIV was instrumental in ushering in mercantilism to Europe and exerted great influence over the government control of the private sector.

One of his biggest contributions was to accumulate huge national wealth for 17th-century France by promoting industry and trade and by building roads, canals, port facilities and merchant fleets, although much of that wealth was wasted by a series of wars waged by the king.

At the same time, like a super human bureaucrat he imposed one restriction after another on private commercial activities, and created a "big government" which has become the foundation of the all powerful bureaucracy in France.

Today, however, the French government is working toward reducing the power of its civil servants while Japan has made little or no progress in controlling its bureaucrats.

In 1996, France was branded as the only industrialized nation that resembled Japan by Bill Emmott, former editor of The Economist, in his book titled "The Bureaucrats' Deadly Sins."

A little over a decade later, French President Nicolas Sarkozy now appears to be aware that his country's top-down, centralized system would prove detrimental, and is likely to launch an all-out campaign to reduce the power of bureaucracy. Indeed, he has already taken his first step in that direction by scrapping the 35-hour work week rules and deregulating the labor market.

Firmly convinced of the superiority of the American government system, Sarkozy is certain to follow the footsteps of former U.S. President Ronald Reagan in his fight against the bureaucracy.

In his inaugural address on Jan. 20, 1981, Reagan listed political, economic and cultural ills his country was facing then and said "government is not the solution to our problem," adding, "It is time to check and reverse the growth of government which shows signs of having grown beyond the consent of the governed."

In a bid to make a "small government," Reagan cautioned against the temptation to believe "that government by an elite group is superior to government for, by, and of the people." It should be noted, however, that he placed more emphasis on making the government functions compatible with the economic reality than on reducing the number of civil servants.

The number of civil servants cannot and should not be the only criterion to pass judgment on the bureaucratic evils. Indeed, in terms of such number, Japan ranks among the best to have attained "small government."

Statistics for the 2004-05 period show that Japan had 5,380,000 people working for the central and local governments and for quasi-public bodies, compared with 5,740,000 of Germany, 5,680,000 of France, 5,840,000 of the United Kingdom and 21,660,000 of the United States.

When converted into the number of persons per population of 1,000, the figures were 42 for Japan, 70 for Germany, 96 for France and 74 for the U.S.

There is another criterion to judge the size of the government, however, and that is the percentage of taxes and social security fees paid by the citizens in gross national income. In layman's language, the ratio shows how much of the total economic activities of the nation is accounted for by the public sector as against the private sector. Japan's number of 39.7 percent is not conspicuously high compared with 47.5 percent of Britain, 61 percent of France, 51.3 percent of Germany and 31.9 percent of the U.S., showing numerically that Japanese bureaucrats are not particularly intrusive.

Why is it then that the Japanese bureaucrats are condemned for committing "deadly sins" by Emmott, a liberal journalist who knows everything from A to Z about Japan and who sincerely wishes this Asian nation to succeed in the international arena.

He is not referring to dirty money being accepted by bureaucrats, to their "parachuting" down to high posts in the private sector with generous compensation, or to the failure of Welfare Ministry officials to accurately keep tens of millions of pension premium payment records.

Rather, Emmott criticizes civil servants in Japan because they are doing what they do not have to do or what they are not authorized to do. This, he points out, deprives the private sector of the chance to think freely and to exercise the spirit of corporate adventure.

Never mind Japan has less bureaucrats per capita than France. What counts is what those bureaucrats actually do. In France, the top-ranking civil servants are graduates of grandes ecoles (elite schools) and they are known as "enarque." Their competence has been proven by their successfully drawing up a legal system for the European Union in which certain aspects of national sovereignty are delegated to the union. On the domestic front, they work diligently by pursuing the three basic national principles of liberty, equality and fraternity.

In Japan, on the other hand, the bureaucratic structure has failed to rid itself of red-tapism despite repeated attempts at reform. The bureaucrats produce mountains of papers every day to write down every detail of restrictions imposed on what the citizens and the private corporations can do.

Of what Colbert accomplished in the late 17th century, strategic aspects that were seen in mercantilism have been inherited by the bureaucrats of France and restrictions imposed on the private sector have been kept alive by their Japanese counterparts. Just as Colbert is said to have started working at 5 a.m., there is nothing unusual to see the bureaucrats in Japan working into the small hours.

What Emmott proposes in order for Japan to undergo real change is to restrict the power and discretions of the government. Japan was the last among advanced democracies of the world to adopt procedural rules that govern the administrative branch of the government.

But the 1994 law containing those rules has so many loopholes that it can hardly change the meddlesome attitude of the bureaucracy. Perhaps the only accomplishment of that law was to give citizens the right not to obey the so-called "administrative guidance" issued by government ministries and agencies.

This is an abridged translation of an article from the April issue of Sentaku, a monthly magazine covering Japanese political, social and economic topics.

This is an abridged translation of an article from the April issue of Sentaku, a monthly magazine covering Japanese political, social and economic topics.


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