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Japan THE ROLE OF GOVERNMENT AND BUSINESS
Although Japan's economic development is primarily the
product
of private entrepreneurship, the government has directly
contributed to the nation's prosperity. Its actions have
helped
initiate new industries, cushion the effects of economic
depression, create a sound economic infrastructure, and
protect the
living standards of the citizenry. Indeed, so pervasive
has
government influence in the economy seemed that many
foreign
observers have popularized the term "Japan Inc." to
describe its
alliance of business and government interests. Whether
Japan in the
mid-1990s actually fit this picture seems questionable,
but there
is little doubt that government agencies continue to
influence the
economy through a variety of policies.
Japanese attitudes towards government have historically
been
shaped by Confucianism
(see Cultural Developments and the Establishment of Buddhism
, ch. 1;
Religious and Philosophical Traditions
, ch. 2). Japan often has been defined as a
Confucian
country, but one in which loyalty is more important than
benevolence. Leadership stemmed from the government and
authority
in general, and business looked to government for
guidance. These
attitudes, coupled with the view of the nation as a
family, allowed
government to influence business, and businesses worked
hard not
only for their own profits but also for national
well-being. There
was a national consensus that Japan must be an economic
power and
that the duty of all Japanese was to sacrifice themselves
for this
national goal. Thus, the relationship between government
and
business was as collaborators rather than as mutually
suspicious
adversaries.
Government-business relations are conducted in many
ways and
through numerous channels. The most important conduits in
the
postwar period are the economic ministries: the Ministry
of Finance
and the Ministry of International Trade and Industry,
known as MITI
(see Trade and Investment Institutions
, ch. 5). The
Ministry of
Finance has operational responsibilities for all fiscal
affairs,
including the preparation of the national budget (see
table 11,
Appendix). It initiates fiscal policies and, through its
indirect
control over the Bank of Japan, the central bank, is
responsible
for monetary policy as well. The Ministry of Finance
allocates
public investment, formulates tax policies, collectes
taxes, and
regulates foreign exchange.
The Ministry of Finance establishes low interest rates
and, by
thus reducing the cost of investment funds to
corporations,
promotes industrial expansion. MITI is responsible for the
regulation of production and the distribution of goods and
services. It is the "steward" of the Japanese economy,
developing
plans concerning the structure of Japanese industry. MITI
has
several special functions: controlling Japan's foreign
trade and
supervising international commerce; ensuring the smooth
flow of
goods in the national economy; promoting the development
of
manufacturing, mining, and distribution industries; and
supervising
the procurement of a reliable supply of raw materials and
energy
resources.
The Ministry of Transportation is responsible for
oversight of
all land, sea, and air transport. The Ministry of
Construction is
charged with supervising all construction in Japan and
Japanesesupported construction abroad. Its responsibilities also
include
land acquisition for public use and environmental
protection as it
related to construction. The Ministry of Health and
Welfare is
responsible for supervising and coordinating all health
and welfare
services, and the Ministry of Posts and Telecommunications
is
responsible for the postal service and electronic
communications.
Data as of January 1994
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