The Practice of Amakudari within the Japanese Employment System

Abstract

In recent years there has been a growing interest in the United States and Western Europe in Japanese management practices and labor incentives. However, studies of the Japanese system have dealt mainly with large private corporations, while paying little attention to two other sectors-mediumand small-scale private business and the government. In this article, we take a look at one subtle area of contact between the government and the private sector, namely, the practice of amakudari. Literally, the word amakudari means descent from heaven and is used to describe the reemployment of government bureaucrats after the termination of their service with the government. The close relationship between government and business in Japan has attracted much attention and has been regarded as one of the causes of Japan's successful economic performance in the postwar period. These ties appear in several forms: administrative guidance (gydsei shido) performed mainly by the Ministry of International Trade and Industry (MITI) as a device to exert its control over the private sector; participation of businessmen in advisory commissions; and financial assistance by the Bank of Japan in the form of low-interest loans to selected industries and the financing of political parties by private companies. Amakudari serves as another link between government and business.1