Dogs and Demons   ::   Керр Алекс

Construction Ministry bureaucrats share in the takings at various levels: in office, they skim profits through agencies they own, and to which they award lucrative contracts with no bidding; after retirement, they take up sinecures in private firms whose pay packages to ex-bureaucrats can amount tomillions of dollars. The system works like this: the River Bureau of the Construction Ministry builds a dam, then hands its operation over to an agency called the Water Resources Public Corporation (WRPC), many of whose directors are retired officials of the River Bureau. The WRPC, in turn, with no open bidding, subcontracts the work to a company called Friends of the Rivers, a very profitable arrangement for the WRPC's directors, since they own 90 percent of the company's stock. Hence the ever-growing appetite at the River Bureau for more dam contracts. When it comes to road building, the four public corporations concerned with highways annually award 80 percent of all contracts to a small group of companies managed by bureaucrats who once worked in these corporations. Similar cozy arrangements exist in every other ministry.

Thus, with the full force of politicians and bureaucracy behind it, the construction industry has grown and grown: by 1998 it employed 6.9 million people, more than 10 percent of Japan's workforce – and more than double the relative numbers in the United States and Europe. Experts estimate that as many as one in five jobs in Japan depends on construction, if one includes work that derives indirectly from public-works contracts.

The secret behind the malaise of the Japanese economy in the 1990s is hidden in these numbers, for the millions of jobs supported by construction are not jobs created by real growth but «make work,» paid for by government handouts. These are filled by people who could have been employed in services, software, and other advanced industries. Not only do my neighbors in Iya valley depend on continued construction but the entire Japanese economy does.

The initial craving for the drug of construction money came from the profits made by politicians and civil servants. But for a craving to develop into a full addiction, there needs to be a reason why the addict cannot stop himself at an early stage – in other words, some weakness that prevents him from exercising self-control. In Japan's case, addiction came about through the existence of a bureaucracy that was on automatic pilot.

Bureaucracy by nature tends toward inertia, for left to themselves bureaucrats will continue to do next year what they did this year. In Japan, where ministries rule with almost no supervision or control by the public, bureaucratic inertia is an irresistible force. The world of official policy functions like a machine that nobody knows how to stop, as if it had only an «On» button, no «Off.