Reassessing Amakudari: What Do We Know and How Do We Know It?

Japan's Financial Crisis: Institutional Rigidity and Reluctant Change. By Jennifer Amyx. Princeton University Press, Princeton, 2004. xix, 365 pages. $39.50.

Informality and Monetary Policy in Japan: The Political Economy of Bank Performance. By Adrian van Rixtel. Cambridge University Press, Cambridge, 2002. xv, 400 pages. £45.00.

For decades, scholars and journalists inside and outside Japan have perceived the practice of amakudari as an important and distinctive feature of Japanese political economy. But they have often disagreed over the questions of how it affects or is affected by larger forces. Observers have seen former bureaucrats as, variously, agents of ministerial influence or monitoring in their postretirement organizations, pipelines for large and small firms back to their regulating agencies, and recipients of rewards for regulatory favors granted. But it has been difficult to compare the accuracy and explanatory power of these various interpretations. Now, with the publication of several major new English-language empirical analyses of amakudari and informal regulation in Japan, it appears to be a good time to review and reappraise the evidence and arguments concerning it.¹

The two books considered in this review employ different data sets, methodologies, and purposes, and not all of their arguments are convincing. But together they offer the most comprehensive and rigorous examination to date of the phenomenon of amakudari. This essay will attempt to clarify what we now know and do not know about amakudari and to compare the utility of the various methodological strategies.

To summarize briefly: Adrian van Rixtel, an economist, has produced the most rigorous empirical study to date of amakudari and other forms of informal regulation in Japanese banking, combining a vast and unique data set with regression analysis to argue that amakudari has had pernicious effects in Japanese banking regulation. Jennifer Amyx, a political scientist, covers some of the same ground as van Rixtel, but with a different data set and a broader mission of delineating the reach and significance of the postretirement networks of the Ministry of Finance (MOF). Amyx's and van Rixtel's books are also valuable contributions to the debates on the disappointing performance of Japanese finance after the bursting of the bubble and on "styles of regulation," as well as the particular phenomenon of amakudari.

What Is Amakudari?

Amakudari is one of the most widely used terms in the study of Japanese politics and political economy. Thus, it is always a bit of a surprise to be reminded that there is no uniform definition.² Certainly everyone agrees that "descent from heaven" occurs when a retired bureaucrat becomes a top executive at a company in an industry s/he once regulated. But beyond this, lack of clarity rules. Does amakudari refer only to elite-track bureaucrats (those who entered the bureaucracy after passing the Level I civil service examination), or also to non-elite-track bureaucrats?³ Should we include positions outside business, such as in government corporations (yoko-suberi) or into politics (seikai tenshin)? Does it matter how long a bureaucrat was in his/her ministry or how high s/he rose within it before leaving? Should we consider only those retirees who are standing directors, top executive officers, and statutory auditors of a firm, or any retiree working in any capacity? And how do we characterize ex-bureaucrats who have had multiple postretirement jobs (watari-dori) or who have moved into the private sector only after a number of years in government corporations? To add to the confusion, some authors propose to bundle amakudari with temporary secondments (shukkō) as Amyx does or with broader societal networks such as old-school ties (gakubatsu).⁴

Most authors in the broader literature on Japanese politics appear to focus on retired, elite-track bureaucrats who reached at least the level of division director in their ministry of origin and are employed in...