personnel exchange among central and local...

Personnel Exchange Among Central andLocal Governments in Japan

Takenori Inoki

Abstract

This paper describes the Japanese system of staff loans and transfers across different levelsof government. It examines various possible rationales for the existence of this system anddiscusses its implications for the building of capacity among local governments.

World Bank Institute

Copyright © 2001The International Bank for Reconstructionand Development/The World Bank1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

May 2001

The World Bank enjoys copyright under protocol 2 of the Universal Copyright Convention.This material may nonetheless be copied for research, educational, or scholarly purposes only inthe member countries of The World Bank. Material in this series is subject to revision. Thefindings, interpretations, and conclusions expressed in this document are entirely those of theauthor(s) and should not be attributed in any manner to the World Bank, to its affiliatedorganizations, or the members of its Board of Executive Directors or the countries theyrepresent.

Personnel Exchange Among Central andLocal Governments in JapanTakenori Inoki2001. 28 pages. Stock No. 37173

iii

Contents

Foreword v

Introduction 1

The Nature of the Data 2

General Trend and Structure of Personnel Loans 3

Discussion 18

Bibliography 22

v

Foreword

This paper was prepared for a project on Local Government Development in Japan. Theproject was organized by the World Bank Institute under the auspices of the Program for theStudy of Japanese Development Management Experience financed by the Policy and HumanResources Development Trust Fund of the Government of Japan.

The principal objectives of this Program are to conduct studies on Japanese and East Asiandevelopment management experience and to disseminate the lessons of this experience todeveloping and transition economies. Typically, the experiences of other countries are alsocovered in order to ensure that these lessons are placed in the proper context. Thiscomparative method helps identify factors that influence the effectiveness of specificinstitutional mechanisms, governance structures, and policy reforms in different contexts. Arelated and equally important objective of the Program is to promote the exchange of ideasamong Japanese and non-Japanese scholars, technical experts and policy makers.

The papers commissioned for this project cover a number of important issues related to localgovernment development in Japan. These issues include: the process of controlleddecentralization; increasing political inclusiveness; redistributive impact of local taxes andtransfers; allocation of grants; municipal amalgamation; personnel exchanges; personnelpolicies; agency-delegated functions; and local policy initiatives.

Farrukh Iqbal, Program ManagerWorld Bank Institute

1

Personnel Exchange Among Central and Local Governments inJapan

Takenori InokiOsaka University, Japan

Introduction

The bulk of staff in Japanese central and local government units are career staff in thesense that they come in at entry level jobs and are then gradually selected and promoted fromwithin to jobs featuring greater responsibilities and larger management spans. There areexceptions to this general rule, however. One important exception is the practice of personneltransfers from the central government to local government units and vice versa. Personnel can beloaned or transferred depending on the length and specific conditions of the out-placement.1 Thispractice illustrates the interdependence of central and local governments in Japan, a feature thathas influenced the manner in which decentralization has proceeded in postwar Japan.

Under the Meiji Constitution, governors and leading staff in prefectures were theEmperor’s functionaries (officials), and the interior minister had the power to appoint them. Onetelegram from the Ministry of Interior was enough to send officials of the Interior Ministry backand forth between the central government and prefectures. Prefectural governments were thusessentially local outposts of the central government in prewar Japan. The Ministry of Interiorwas a gigantic ministry, covering a wide variety of tasks, including local administration, publicelections, the police, sanitation, and construction works. The prefectural governor was an officialappointed by the Emperor. Because of its power and influence in central government, theMinistry of Interior was the most popular ministry among job-seeking imperial universitystudents, of whom only the cream were admitted to the Ministry’s ranks.

The post-war Constitution opened a new chapter in central-local relations byguaranteeing local autonomy. It provided for the prefectural governor to be elected by a publicvote of the local inhabitants, instead of being appointed by the Interior Ministry, as under theprevious Constitution. This is probably the greatest difference between pre- and post-war localgovernance systems. All the public servants in prefectural governments are also local staff,appointed by the governor in each prefecture. Under this new Constitution, recruitment andpromotion are managed on a merit basis by the appropriate local government.

I would like to thank Hiroaki Inatsugu, Farrukh Iqbal, Michio Muramatsu, Shun-ichi Furukawa, and the participants of theWorld Bank workshop on Local Government and Development in Japan, for their helpful comments. Furukawa’s detailedcomments were particularly useful. I also wish to thank Yukiko Tsuji for research assistance. Comments from Takeo Hoshi,Regine Mathias, Yoko Sano, Yoshio Higuchi, Masako Maeda, Hitoshi Nagano, and the participants of HRM seminar ofKeio University were also helpful at an early stage of this research.1 A “loan” (shukko or haken) usually means a temporary movement of staff from one organization to another for a limitedlength of time, while a “transfer” (tenseki) is a placement of staff, including payroll registration, from one organization toanother for an indefinite length of time. These two terms are often used interchangeably, because the duration of thesetransfers are generally not explicitly specified. Therefore, these two terms are not distinguished in this chapter except whenit is necessary.

2 Takenori Inoki

Each prefecture, however, did not immediately gain a stock of knowledge of how to findand train capable leading staff. Publicly elected governors, therefore, were expected to be ex-leading officials from the central government who could continuously perform administrative jobsin newly established local governments. In a sense, local governments did want to receive, at leastin the early postwar years, officials from the Interior Ministry as “relief” manpower. Later, afterthe 1960s, local governments gradually began to pursue their own personnel policy of conductingindependent recruitment and promotion to develop their core leading staff. This practice of“relief”, however, carried on. Bureaucrats transferred from the central government, who wereoriginally expected to serve on a temporary basis, gradually began to take different roles in localgovernments. Indeed, in many cases, such “relief” positions became hereditary. In these cases,when one staff member returns to the central government after completing his two or three yearsin office, another staff member from the same ministerial position enters the same office in theprefectural government.

Such practices pose questions about the motivations of the central and localgovernments. What are the incentives which lead them to engage in personnel transfer? Forinstance, is there any financial reason for such practices? Does a prefectural government thatconsistently receives staff from the central government enjoy any financial favor from the centralgovernment? Does the exchange of personnel stabilize center-local relations by providing asteady flow of information? Does the transfer contribute to increased managerial capacity of thecentral government? It is possible to shed light on these questions by reference to certain patternsin the data on intergovernmental personnel transfer as well as from anecdotal evidence.

The Nature of the Data

Since our main interest lies in the motivation underlying personnel exchanges, a naturalplace to look for relevant data is the career profiles of central government staff, especially the so-called “leading career staff” who are typically recruited from among college graduates by anextremely competitive career staff examination. There are two sources of information on thecareer of leading staff in the central government. One is the set of annually published directoriesof individual ministries that provides information on such career details as accession, promotionand transfers. A second source is interviews with staff currently stationed in local (mainlyprefectural) governments. Interviews provide contextual and qualitative information while thecareer directories are quantitatively rich in information about general trends and structures.

In the directories, the career of each staff member is arranged in the following way:name, date of birth, birthplace, and last school attended are listed first, and careers after the dateof admission to the ministry are chronologically arranged. The example given below is the case ofa Vice-Minister of MoHA (Ministry of Home Affairs), who retired several years ago. Careerdirectories are published annually, except for that of MoHA, which was discontinued in 1992.The directories contain data on: the frequency of transfers and the name of the prefecturalgovernment; the positions in prefectural governments occupied through these loans; and theperiods of loan, which together indicate whether or not the loan is hereditary in nature, and soforth.

Personnel Exchange Among Central and Local Governments in Japan 3

Directory Listing: Vice-Minister of MoHA

1958 April entered MoHA1958 April to Hokkaido, Archives, Tax, Local Finance1960 Dec. To Shizuoka, Industry and Commerce, Education1962 Jan. MoHA, Regional Development1964 Oct. to Tochigi, Director, Regional Section1966 April to Tochigi, Director, Personnel Division1967 April to Kyoto, Director, Education Commission1969 April MoHA, Assistant Director1969 Nov. MoHA, Assistant Director, Local Finance Division1974 April MoHA, Deputy Director, Local Finance Division1974 July to Kitakyûshûshi, Chairman, Education Commission1976 Nov. MoHA, Assistant Vice-Minister1978 Jun. Ministry of Construction, Urban Development1980 July MoHA, Assistant Vice-Minister1980 July Deputy Mayor, Kitakyûshûshi1983 July MoHA, Director, Budget Section1987 Oct. MoHA, Deputy Vice-Minister for Policy Coordination1989 Jun. MoHA, Deputy Vice-Minister for Administration1991 Oct. Vice-Minister of MoHA

For our research purposes, there are some limitations to these data. The staff currentlyon loan to any prefectural government are not listed in the directory, but if the loan is of ahereditary nature (which is usually the case), we can observe successive loans to the sameoffice over many years. The staff listed in this directory is limited to executives above the levelof assistant director (Kachôhosa). So it does not contain information on lower-levelemployees. We can, however, obtain the career information of these young officials partlyfrom the career data of the upper-level executives when they were young.

General Trend and Structure of Personnel Loans

One survey, conducted 20 years ago (Muramatsu 1981), summarizes the frequency ofloans to prefectural governments in the past based on interviews of 251 elite bureaucrats in 8ministries. As can be seen in Table 1, MoHA occupies a rather exceptional position amongthese eight ministries, showing an extremely high frequency of loans and transfers. Whileeconomic- policy-related ministries such as MoF, MITI (Ministry of International Trade andIndustry), and the Economic Planning Agency (EPA) record very low numbers of loans in thissurvey, the three ministries that came into being through the dissolution of the InteriorMinistry in December 1947—MoL (Ministry of Labor), MoC (Ministry of Construction),and MoW (Ministry of Welfare)—show uniformly high rates of loans to local governments. It

4 Takenori Inoki

is, in a sense, quite natural that MoHA, which is one of the main successors of the InteriorMinistry in central-local governance, should pursue an intensive personnel exchange policywith local governments.

Table 1: Frequency of Bureaucrats on Loan to Local Governments

Frequency

Ministries0 1 2 3 4 5 7 8 14 N

EPAMOFMOWMOAMITIMOLMOC

MOHA

100.082.921.431.483.311.134.6

14.654.857.116.748.142.3

2.411.911.4

25.923.1

7.1

14.8

42.1

2.4

31.6

2.4

10.5 5.3 5.3 5.3

100100100100100100100100

1941423542272619

TOTAL 47.8 31.9 9.2 6.0 2.8 1.2 0.4 0.4 0.4 100 251

Source: Michio Muramatsu, Gyosei Elite Chosa (Survey on Elite Bureaucrats) conductedbetween December 1976 and February 1977. Sample Size 251.

Ministry of Home Affairs (MoHA)

In prewar Japan, the governors of all prefectures were stationed exclusively through thepersonnel policy of the Interior Ministry. The governors were Chokuninkan (appointees bythe ordinance of the Emperor) and were in office only for a few years. Even after the InteriorMinistry had been disbanded, remnants of this system survived with respect to the deputygovernor, the highest local post achievable without direct election. Deputy governors of Nara,Tottori, Shiga, Ooita, Gifu, Miyagi, Shizuoka, and Tokushima are regularly sent from MoHA.At the municipal level, similar practices are observed for deputy mayors. Kitakyûshû-shi,Funabashi-shi, Nase-shi, Kawaguchi-shi, Morioka-shi, and Matsue-shi are such cases (seeTable 2).

One interesting case is that of Kyoto City, where the deputy mayor's office has beenoccupied alternately by elite bureaucrats from MoC and MoHA. The first case was Mr.Kinoshita, a MoC bureaucrat, who took office at the Urban Planning Division of Kyoto City(Toshikeikaku-Buchô) and was promoted, through the director-general of the ConstructionBureau, to deputy mayor in 1990. After Mr. Kinoshita, Mr. Satô from MoHA took office in1992, and Mr. Uchida from MoC succeeded to the same post in 1994, followed by Mr. Kitazatofrom MoHA. The reason why Mr. Kinoshita took office as the deputy mayor of Kyoto in thefirst place was not clear from the interview. He did not directly come to the office as deputymayor, but was "quasi-internally" promoted in the Kyoto City office. It is indeed undeniablethat the connection between Kyoto City and MoC has been strong since long-serving mayorImagawa was first transferred to a director-general post in the Kyoto City office from MoC.


(Incidentally, Mr. Satô, after serving as deputy mayor in Kyoto for two years, returned toMoHA; three years later he was appointed deputy governor of Fukuoka Prefecture.)

Table 2: Transfers from MOHA to Deputy Mayors

Aomori (1) Kasugai (4) Matsuyama (3) Sakai/Takaishi (1)

Chiba (1) Kawaguchi (1) Morioka (1) Sendai (1)

Fukuoka (2) Kawasaki (1) Nagano (1) Soka (1)

Funabashi (1) Okohamau (8) Naze (1) Takarazuka (1)

Itami (1) Kurashiki (2) Okayama (2) Urawa (2)

Kaji (1) okoh (2) Omiya (1) Wakayama (4)

Kashima (1) Matsue (1) Osaka (2) okohama (1)

Note: Number of Deputy Mayors transferred is indicated in the parenthesis

MoHA has a number of "hereditary" director-general posts, especially in GeneralAffairs (Sômubuchô) in prefectural governments. The following list shows the pattern of suchappointments over the last quarter century or so:

Akita (1985–87)Aomori (1979–82) (1987–90) (1990–92)Ehime (1979–82)Fukui (1987–90)Hiroshima (1989–91)Hokkaido (1984–86) (1986–88)Hyogo (1991–92)Ibaragi (1983–86)Ishikawa (1990–91)Kagawa (1986–88) (1988–90)Kochi (1982–85) (1987–89)Kyoto (1978–81) (1981–84)Miyagi (1981–83)Nara (1978–81) (1985–87) (1987–90)Okayama (1989–91)Ooita (1979–83)Shiga (1988–91)Shizuoka (1984–86) (1986–87) (1988–91)Tochigi (1984–86) (1990–92)Tottori (1980–83) (1987–89)Toyama (1979–81) (1986–90)Yamanashi (1976–79) (1981–83) (1985–87)

6 Takenori Inoki

Table 3 provides data on the number of loans or transfers from various governmentministries to local governments. Column MoHA1 denotes the total number of transfers fromMoHA while column MoHA2 denotes the total number of transfers to director-general posgts ineach prefeecture. As can be seen from this table, the practice of personnel transfer is quitepopular, especially for MoHA.

At the same time, there is also a large number of staff on loan to the central MoHA officefrom prefectural governments. These staff were all recruited by the local government and loanedto posts such as deputy director (Rijikan), assistant director (Kachôhosa), or senior specialist(Shidôkan) in the Tokyo MoHA office. This movement virtually forms a counter-stream ofloans and transfers in intergovernmental personnel policy. The numbers listed below wereobtained from stock data in the 1992 directory, not a sum of the past flows of staff from localgovernments to MoHA:

From Hokkaido 3 From Akita 1Fukushima 1 Tochigi 3Saitama 3 Kanagawa 1Kawasaki 1 Niigata 1Toyama 2 Ishikawa1Nagano 1 Gifu 2Hyogo 2 Hiroshima 1Tokushima 1 Fukuoka 1Saga 1 Nagasaki1Miyazaki 7 Kagoshima 2

Table 3: The Number of Loans or Transfers from Central Ministries to Prefectures

MOF MOHA1 MOHA2 MOC MOL MOW MOE

1 Hokkaido 18 2 2 7 8 2

2 Aomori 5 9 3 3 1 6

3 Iwate 2 5 2 4 1

4 Miyagi 6 3 2 2 6

5 Akita 11 1 4 6 3

6 Yamagata 2 5 1 1 5 1

7 Fukushima 4 9 1 6

8 Ibaragi 7 1 15 4 7

9 Tochigi 8 2 5 4

10 Gunma 5 3 3 1

11 Saitama 12 2 7

12 Chiba 7 10 1 4 6

13 Tokyo 2 2

14 Kanagawa 6 1 1 2

15 Niigata 10 2 5 6 4

16 Toyama 1 7 2 2 8 6 1


MOF MOHA1 MOHA2 MOC MOL MOW MOE

17 Ishikawa 11 8 1 1 2 7 1

18 Fukui 11 1 1 7

19 Yamanashi 7 3 2 1 1

20 Nagano 5 1 6 1

21 Gifu 11 1 4 2 9

22 Shizuoka 17 4 2 7

23 Aichi 4 4 3 4

24 Mie 8 8 2 1 9 6

25 Shiga 4 13 2 3 6 9 4

26 Kyoto 14 2 3 3

27 Osaka 2 3 8 1

28 Hyogo 14 1 4 2 4

29 Nara 10 4 3 1 1

30 Wakayama 6 2 4 1 9

31 Tottori 12 3 6 4 5

32 Shimane 2 6 3 4

33 Okayama 1 13 1 2 7 5 7

34 Hiroshima 8 1 3 3 1 3

35 Yamaguchi 1 2 2 3 5

36 Tokushima 3 7 1 2 2 3 7

37 Kagawa 11 2 1 2 11

38 Ehime 4 1 4 1

39 Kochi 6 2 1 4

40 Fukuoka 6 3 11 7 6

41 Saga 6 1 2 2

42 Nagasaki 12 1 1 4

43 Kumamoto 6 8 4 9 2 4

44 Ooita 9 2 1 3 6 7

45 Miyazaki 12 4 1 2

46 Kagoshima 14 3 3 1 6

47 Okinawa 1 1 4 2

Total # of Loans &

Transfers

50 381 132 138 161 125

Number of Leading

Career Staff

416 170 294 215 558 503

Average Frequency 0.12 2.24 0.45 0.64 0.29 0.25

8 Takenori Inoki

Two Examples of the Careers of MoHA Bureaucrats

As we have seen, MoHA bureaucrats occupy a special position among all ministries intheir career formation: their mobility between the central and prefectural governments isextremely high. We will outline the careers of two MoHA bureaucrats of different generationsbelow, in order to grasp the specific nature of their mobility. Little change is observed duringthe time-span of almost two generations, in spite of such a seemingly large institutional changeas the disbandment of the Interior Ministry shortly after the war.

Mr. A’s Career (Earlier Generation). After graduating from the Law Faculty at theUniversity of Tokyo, Mr. A entered the Interior Ministry (IM) in 1941. In the same year,such celebrities as Y. Nakasone (later prime minister), D. Utsumi (later the president of theNational Personnel Authority), M. Ozawa (later a congressman), and B. Tsuda (later governorof Kanagawa Prefecture) also passed the Kôbun (the examination for the career bureaucrats)and entered the IM.

In his first year at the IM, he served as a sort of trainee as section chief of the EconomicControl Section in the Economic Department of Ibaragi Prefecture. It was not uncommon to bestationed in local government soon after the accession to IM, since personnel management ofcareer public servants was completely centralized in prewar Japan. It was then a generallyaccepted practice that economic control of the local economy was in the hands of the IM,whereas economic control in the central government was executed by Shôkoshô (Ministry ofCommerce and Industry, origin of the present MITI).

From July 1942 to May 1946, he was conscripted and served in the military; hereturned to the IM, Bureau of Local Office, in July 1946. His first job after his return to theIM was to reorganize local finance and to reform the General Election Act from a small-districtsystem to a medium-district system.

The dissolution of the IM was decided in May 1947 and executed on 31 December inthe same year. The IM was divided into 12 new ministries and agencies. On this occasion, Mr.A reconsidered his future career plan, including job opportunities outside the centralgovernment. He finally moved to the secretariat of the local public finance commission, whichis composed of 5 commissioners (including state minister) and approximately 50 staffmembers. He was appointed as secretary general of this commission. After this careerinterruption in MoHA, Mr. A returned to the Agency of Home Affairs (then attached to thePrime Minister’s Office) in 1953, and finally to the newly organized Ministry of HomeAffairs in 1960.

In an interview, Mr. A commented on the difference between governors in prewar andpostwar Japan. The prewar governors usually stayed in office only for one or two years, andthey were morally upstanding and relatively free of political corruption. They performed theirduties, always paying attention to the activities and the intentions of the central government inTokyo. The postwar governors, in contrast, primarily focused on the preference of theconstituency in the prefecture, because the governors were to be elected after the war. Thischange, although democratic in nature and supposedly assuring more local autonomy, has


brought with it certain drawbacks. The most serious is that the drive to be reelected time andagain tends to adversely affect the political atmosphere in prefectures.

In prewar Japan, certain prefectures—three major cities (Tokyo, Osaka, and Kyoto) andthe five port cities (Kanagawa, Hyogo, Fukuoka, Niigata, and Nagasaki)—were thought tooffer important positions for dispatch from the IM in the central government. Mie Prefectureoccupied a special position as the location of the Ise Shrine (the head Shrine of JapaneseShintoism). The Police Department chief in Ibaragi and Nagano Prefectures played specialroles in political security related to rightists and leftists, respectively. Yamaguchi (Kanmon)was also an important prefecture in handling foreign matters related to immigration. Governorsand career bureaucrats stationed in these politically important prefectures were implicitlypromised bright careers.

This personnel transfer from the IM to the prefectures left its basic pattern in thehuman resource management of MoHA, even after the dissolution of the IM in 1947.

Mr. B's Career (Later Generation). After graduation from the Law Faculty at theUniversity of Tokyo in 1973, Mr. B entered MoHA directly and began his career in theregional section office in Shiga Prefecture. In 1975 he was transferred as staff of the MoHACollege Office and returned to the Local Finance Division in MoHA after three years. Between1978 and 1980, he studied at Harvard Law School as a dispatched student from the NationalPersonnel Authority. From August 1981, he served as the chief of the local finance section inEhime Prefecture for two years. Then he went back and forth between MoHA and localgovernments such as Ishikawa and Kyoto. In Ishikawa, he served as director-general ofindustry and labor, and then of general affairs. After returning to MoHA, he occupied suchpositions as senior specialist for local finance and director of the Public Relations Division. In1994, after serving as director of the Local Finance Coordination, he was transferred as deputymayor of Kyoto City.

Interior-Related Ministries

We will next investigate the trend and structures of the three ministries—MoC, MoL(Ministry of Labor), and MoW (Ministry of Welfare)—that belong to another group ofimportant postwar successors of the Interior Ministry. Here we also find similar flows ofhuman resources from the central to the local governments. The tendency, however, is not asstrong as in the case of MoHA.

MINISTRY OF CONSTRUCTION (MOC). Loans from MoC are to the post of Kacho(director) in prefectural governments. Directors of general affairs in 10 prefectures, directors ofplanning in 20 prefectures, and directors of construction in 33 prefectures are loaned staff fromMoC (see Table 4) Posts higher than director—director-generals—are taken by MoCpersonnel in such prefectures as Mie, Ibaragi, Osaka, Tokushima, Yamanashi, and Nara (seedouble-circles in Table 4).

The large number of loans from MoC is partly the result of its large number of technicalofficers (Gikan) in MoC. Career bureaucrats in the MoC, as in other ministries, are composedof two categories: Jimukan (secretary officer), mainly graduates in law, and Gikan, graduates

10 Takenori Inoki

in engineering, primarily civil engineering. Among annual new entrants in MoC, about 15 areJimkan and more than 60 are Gikan. However, since more than half of the executive positionsin the Tokyo head office of MoC are occupied by Jimkan, most of the Gikan find theirpositions either in MoC’s regional office or in prefectural government as loaned officers. Thisbeing the case, MoC naturally has a strong incentive to maintain the maximum number ofposts in local governments.

The inflow of staff from MoC is also observed at the municipal level. Deputy mayors(Nagaoka, Kure, Shimonoseki, Ootsu, Shizuoka, Hiratsuka, Kyoto, Takasaki, andHamamatsu), director-generals or deputy director-generals of cities such as Tokorozawa,Sendai, Gifu, Kitakyûshû, Takasaki, Kisarazu, Tokushima, Fukuoka, and Tsuchiura are butsome examples.

In addition to such conventional construction work as flood control, a typical task carriedout by MoC in prefectures has been construction and management of public housing. Inallocating public housing nationwide, prefectural governments play the role of mediator betweenthe central government and the municipalities, especially with regard to allocation of subsidiesfrom the central government. In this respect, the subsidy is a most important instrument in thecontrol the municipal governments by the central government, and the prefectural governmentswith career staff from Tokyo used this instrument in competitive situations.

Table 4: Directors from MOC to Prefectures

General Affairs Planning Constructions

1 Hokkaido

2 Aomori

3 IwateÉ ≠ É ≠

4 MiyagiÉ ≠

5 AkitaÉ ≠ É ≠

6 YamagataÉ ≠

7 FukushimaÉ ≠ É ≠

8 IbaragiÅ ù Å ù

9 Tochigi

10 GunmaÉ ≠

11 SaitamaÉ ≠



12 ChibaÉ ≠ É ≠

13 TokyoÉ ≠

14 KanagawaÉ ≠

15 NiigataÉ ≠

16 ToyamaÉ ≠ É ≠

17 IshikawaÉ ≠

18 Fukui

19 YamanashiÅ ù

20 NaganoÉ ≠

21 GifuÉ ≠ É ≠ É ≠

22 ShizuokaÉ ≠ É ≠ É ≠

23 AichiÉ ≠

24 MieÅ ù É ≠

25 ShigaÉ ≠

26 KyotoÉ ≠ É ≠

27 OsakaÅ ù Å ù

28 HyogoÉ ≠ É ≠

29 NaraÅ ù

30 WakayamaÉ ≠ É ≠

31 TottoriÉ ≠ É ≠

12 Takenori Inoki


32 ShimaneÉ ≠ É ≠ É ≠

33 OkayamaÉ ≠

34 HiroshimaÉ ≠ É ≠ É ≠

35 YamaguchiÉ ≠

36 TokushimaÅ ù

37 Kagawa

38 Ehime

39 Kochi

40 FukuokaÉ ≠

41 SagaÉ ≠

42 NagasakiÉ ≠

43 KumamotoÉ ≠ É ≠ É ≠

44 OoitaÉ ≠

45 MiyazakiÉ ≠ É ≠

46 KagoshimaÉ ≠

47 OkinawaÉ ≠

É ≠: Directors

Å ù: D i r e c t o r - G e n e r a l s


Table 5: Loans from MOL to Prefectures

T o t a lDirectors of

Employment

Securities

Director –

Generals etc.

Deputy

Director-

Generals etc.

1 Hokkaido 10 3 2

2 Aomori 3 2 1

3 Iwate

4 Miyagi 3

5 Akita 7 5

6 Yamagata 1 1

7 Fukushima

8 Ibaragi 4 4

9 Tochigi 5 5

10 Gunma 3 3

11 Saitama

12 Chiba 1 1

13 Tokyo

14 Kanagawa 1 1

15 Niigata 5 3 2

16 Toyama 12 4

17 Ishikawa 2 2

18 Fukui 1 1

19 Yamanashi 1 1

20 Nagano 6 6

21 Gifu 2 2

22 Shizuoka

23 Aichi 3 3

24 Mie 1 1

25 Shiga 6 5

26 Kyoto 3 3

27 Osaka 8

28 Hyogo 4 2 2

29 Nara

30 Wakayama 1 1

31 Tottori 4

32 Shimane

33 Okayama 9 1

34 Hiroshima 3 2

35 Yamaguchi 3 2 1

14 Takenori Inoki

T o t a lDirectors of

Employment

Securities

Director –

Generals etc.

Deputy

Director-

Generals etc.

36 Tokushima 2

37 Kagawa 1 1

38 Ehime 4 3

39 Kochi

40 Fukuoka 12 5 3

41 Saga

42 Nagasaki 1 1

43 Kumamoto 14 4

44 Ooita 5 1

45 Miyazaki 1 1

46 Kagoshima 3 3

47 Okinawa 4 4

MINISTRY OF LABOR (MOL). Table 5 shows the numbers of loans and transfers fromMoL to prefectures. Since these are not the numbers of staff but the numbers of transfers thatcurrent staff have experienced, they are larger than the numbers listed in the MoL column inTable 1. MoL elements that were also originally a part of the IM display a high loan rate,which was brought about by the practice of local postings of MoL bureaucrats from theTokyo office. These bureaucrats stationed in prefectural government are responsible forcollecting data concerning local employment conditions and employment insuranceaccountings.

They usually become directors of the Employment Securities Division, but in somecases, as in Niigata and Fukuoka, they are assigned to the position of director-general of theLabor Bureau (Rôdôbuchô). Receiving prefectures are spread throughout the nation. This mustbe the traditional personnel policy inherited from the time of the IM. The large number ofloans from MoL is related to Chihô-Jimukan Seido, or the localized national employee or thelocal office system in prefectural government. This rather special system is not an agency-delegated function. The officers who handled the central government work are posted atprefectural positions such as job placement offices. We will see below the typical career of anelite MoL bureaucrat in postwar Japan.

A CAREER EXAMPLE AT MOL. Mr. C graduated from the Law Faculty at theUniversity of Tokyo in 1956 and entered the MoL. His first job was as a personnel officer inthe Department of General Affairs in the Central Labor Commission in Tokyo. A year andhalf later, he moved to the Labor Standards Bureau in Hokkaido as a supervisor of its staffmembers, as well as a researcher looking into the working hours of taxi drivers and the laborconditions of miners and fishermen in Hokkaido District.

In July 1958, he returned to the Employment Security Division of the MoL toparticipate in designing an employment policy (legislation similar to the Employment Act in


the United States). This effort was not actualized as law, because there were complicationsrelated to collaboration with the Economic Planning Agency.

Until 1965, he participated in enacting laws such as the Employment PromotionCorporation Act (1961), the Unemployment Remedy Act (1963), and the EmploymentMeasures Act (1965). Then, in August 1965, he was sent to Kumamoto Prefecture as directorof the Employment Security Division. In this position he supervised nearly 260 employeesand engaged in personnel management of the division and in the administration of theemployment insurance scheme. He also served as director of public finance in the sameprefecture for another two years.

From 1970 to 1974, he served as first secretary in the Japanese Embassy in London andcovered economic and labor relations problems in England. After his return to Japan, his careerexpanded from the Employment Securities Bureau to the Trade Union Bureau in MoL. Afterserving as director-general of the Labor Standards Bureau during of 1986–87, he retired fromMoL in 1987, and has since served in several offices and councils connected with MoL aspublic corporations.

By following his career, we can clearly observe the pattern of the personnel transferscheme in MoL, although his career was not as far-reaching as the MoHA staff in general. Yetthe careers of the postwar MoL bureaucrats still show a remnant of the prewar career patternof IM bureaucrats.

MINISTRY OF WELFARE (MOW). University-graduate career officials in MoW areusually stationed in prefectural government at least once in their careers. In contrast, thecareers of the staff, recruited among high school graduates and those finishing college whileserving in MoW, are generally confined to the Tokyo office and are not extended to posts inthe local government. Specialists in medicine, pharmacology, and actuarial statistics are treatedas non-career bureaucrats in the framework of the MoW personnel policy. Those who wererecruited by the local government also move across prefectures and between Tokyo and localgovernments.

Career officials are transferred to the post of director-general of the Hygiene and HealthBureau, director of the Social Welfare Department, or to the Social Insurance Department in localgovernments. Director-general positions in the Police Bureau in prefectural governments aresometimes occupied by MoW bureaucrats from Tokyo. This may demonstrate that the MoWstill carries over the personnel policy from the time of the IM. Indeed, MoW shows a high loanrate compared with other ministries ( see Table 3). The prefectures that receive career officialsfrom Tokyo are spread nationwide, with the exception of Miyagi, Gunma, Tokyo, Nagoya,Gifu, Kyoto, Hyogo, and Nagasaki. Here again, the prefectures with large urban areas are notincluded. Thus MoW personnel policy implicitly but clearly differentiates the human resourcedevelopment of career officials from that of non-career officials in the span of experience gainedthrough the loans and transfers program between MoW and local governments.

As for the role of the prefectural government, we can again observe a tunnel-likefunction of the prefectural government between Tokyo and the municipalities. The service forthe public nursery is a clear example. The prefectural government checks the nursery standardand admission criteria for the public nursery, and there is little room for discretion. Since each

16 Takenori Inoki

municipality has its own demand for nursery service, the municipal government has a policyfor fees paid by parents and the municipal expenditure for its cost. Here again, the centralgovernment does not (or cannot) exert any power on the prefectural or municipal government(see Muramatsu 1988, pp. 127–29).

Other Ministries

We have outlined the general trend and structure of intergovernmental loans andtransfers of human resources between MoHA and other Interior-related ministries and localgovernments. Ministries not linked by inherited function or traditions to the prewar InteriorMinistry appear to show slightly different patterns. This can be observed, for example, in thecases of MoF (Ministry of Finance) and MoE (Ministry of Education).

MINISTRY OF FINANCE ( MOF ). Deputy governors (the highest local post that can be heldwithout direct election) of at least four prefectures—Okayama, Toyama, Iwate, andAomori—are sent from MoF. We can observe from table 6-3 that the number of loans fromMoF to director-general positions in prefectural governments are heavily concentrated in eightprefectures: Aomori, Yamagata, Ishikawa, Mie, Shiga, Wakayama, Tokushima, and Kumamoto.

Each prefecture has a rather fixed relationship with the MoF in the post it offers toMoF. Mie, Tokushima, and Yamagata regularly offer the post of the director-general of generalaffairs (Sômubuchô) to MoF staff. Kumamoto offers the post of the director-general ofplanning and development, whereas Wakayama and Aomori offer the Fiscal and EconomicSection directorship. The case of Ishikawa Prefecture is striking, in the sense that all threeimportant directorships are occupied by MoF staff from Tokyo.

It is certainly difficult to connect this personnel movement with any financialadvantages given to prefectural governments. In order to verify the existence of such a causalrelationship, we have to define the starting point of such a personnel loan and explore whetherany simultaneous changes in financial or budgetary conditions have occurred in the localgovernment concerned. However, we can at least say the following: The local governmentusually has frequent contact with the central government, especially with MoF and MoHA,because these two ministries have considerable power to control local finance.2 The governormust also constantly approach LDP, which exerts considerable control over the actualbudgetary process. While the central government has to depend on the local governmentbecause of its local connections to political parties, the local government must depend heavilyon the central government with respect to local finance. In this way, there is a mutuallybeneficial, interdependent relationship between the central and local governments.

2 These two ministries, in most of the cases, exert opposite pressures on the budgetary process—the influence ofMoHA is expansionary to local finance, and the influence of MoF is contractionary.


Table 6: Loans and Transfers in the Ministry of Education (MOE)

Number of Loading Staff Listed in 1996 Directory 403

1. Recruited by MOE as University Graduates• Loaned to Prefectures (to Prefectural Education Commission)• Transferred to Embassy• Facility Administration & Other Specialist Jobs• Others

2. Recruited by MOE as High School Graduates and later Graduated fromUniversities

• Loaned to Prefectures

3. Recruited by Local Office (National Technical High School, NationalUniversity, etc.) and transferred to MOE: All High School Graduates

4. Transferred to MOE from High School Teacher, mainly as TextbookSpecialist

5. Transferred to MOE from College Teacher mainly as Senior CurriculumSpecialist

6. Loans from Other Ministries

7. Loans from Private Firms

8. Loans from Others

15210442222

43

3

43

57

39

8

1

2

MINISTRY OF EDUCATION (MOE). In MoE, there are several categories of staff; placementis made according to educational background and career before being transferred to MoE (seeTable 6) The first and the most dominant group includes those recruited by MoE as universitygraduates, who form the main body of so-called career MoE bureaucrats. The members of thisgroup are listed in the loans and transfers program of MoE and prefectural governments. Asshown in Table 6, this group numbers approximately 150 out of the 400 listed in the 1996directory. Out of these 150, more than 100 have been loaned to prefectures for two years duringtheir careers, mainly to Prefectural Education Commissions (Kyouiku-iinkai). Their connectionwith local government is tightly formed and is said to endure in their careers.

18 Takenori Inoki

These transferred career officials perform a wide variety of jobs in local government.The most common position is in the Prefectural Education Commissions, but sometimes,although this is rather exceptional, these officials assume such positions as public relationssection chief or supervisor of planning and development (Kikaku-kaihatubu Sanji) inprefectural government. Non-career staff have an entirely different path. Approximately 100non-career MoE officials were recruited directly by MoE as high school graduates and obtainedbachelor's degrees while serving MoE. In striking contrast to the career officials, only 3 out ofthese 100 non-career MoE employees have the experience of being transferred to prefectures.There is a clear-cut duality between career officials and non-career officials in the loans andtransfers policy.

It is worth noting that prefectures receiving staff from MoE do not include prefectureswith large cities such as Tokyo, Kanagawa, Saitama, Aichi, Kyoto, and Osaka. Prefectureslocated in rural regions, such as Akita, Fukui, Yamanashi, Tottori, Saga, Miyazaki, andOkinawa, are excluded. Such geographical—that is, urban-rural—regularity may partly be aresult of political tension among the MoE, Prefectural Education Commissions, and teacher’sassociations in these prefectures.

Discussion

In the previous section, we surveyed the extent of loans and transfers from the central toprefectural governments for three groups of ministries: (1) MoHA, (2) the Ex-Interior-relatedministries, and (3) other ministries. This (mutual) personnel exchange was extensive and deep,especially in MoHA and other offices related to the former IM, such as MoC, MoW, andMoL. Such exchange is also observable, although to a lesser extent, in other ministries,including MoE and MoF. In this section we will discuss the possible interpretations of thisunusual practice of personnel loans and transfers between the central and local governments. Itis very important to distinguish between the intention and the results of this policy in thefollowing discussions, because loan practices may have produced an unintended result. This isparticularly true for the hereditary nature of staff exchange. For instance, once the exchange isimplemented and repeated a few times, it tends to become an expected practice. If the localgovernment declines renewal of the staff loan, it may imply either a low evaluation of aspecific loaned person or implicit non-cooperation with the ministry. In this sense, the loan issometimes irreversible. The loan could continue, although its original purpose had been fulfilledor had disappeared. There are, however, possible benefits in this policy for both sides.

Transfer of the Payroll to Local Government

What sort of benefits exist for the central government? Apart from the possible"expansionist" efforts by the central government in obtaining posts in local governments, asmentioned in the case of MoC, one obvious reason for this practice is budgetary. Staff on loanfrom the central to a local government are usually paid by the local government. They onceformally retired from their central ministries and were re-employed through the "interviewtest," perfunctorily conducted by the prefectural government. This practice substantially


decreases the salary burden of the central government. It means that, given that the number ofstaff in the central government is constant, the personnel transfer policy reduces the budgetaryburden of ministries by shifting salary payrolls to local governments. Furthermore, since theyare scheduled to return to their home ministries after gaining experience in each prefecture, theyno doubt bring back rich information on the socioeconomic problems of the prefecture theyserved. This truly constitutes a great invisible benefit to the central government, which incursvirtually no cost.

On-the-Job Training for the On-the-Spot Information

The loans and transfers personnel policy is sometimes directly connected to theimplementation of a specific policy. Large-scale projects, such as construction of an airport ornew trunk-line railway, pollution control, and fiscal reconstruction, are usually carried out notonly by the funds and staff in local government, but also by the funds and informationnetwork offered by the central government.

These projects, because of the nature of the joint work by the two levels of government,usually provide good opportunities for the central government staff to experience OJT.Through this personnel policy, transferred staff are extensively exposed to politicallyimportant issues on the administrative front in local governments. They can collect and conveyinformation (so-called "good items"), which they hope will help vitalize regional publicpolicies that are designed or partly assessed by the central government through local tax grantsand nationwide industrial policies. The central government is in great need of informationpertaining to local issues in order to make their policy scenarios indispensable or inevitable.

This point is closely related to the reason that OJT is necessary in the careers of blue-collar workers and as an efficient method of transmitting information on the skills andknowledge required in an economic organization. Specific knowledge that spreads extensivelyat the production site, rather than general and abstract knowledge acquired by schooling,sometimes plays the most important role in the productive operation of an organization. Thiskind of knowledge and skill is extremely difficult to transmit except through the intermediationof individual contacts based on demonstration or direct observation. Such specific knowledgecan be acquired through experience in the front lines of production. In this respect, we are ableto see some analogy to the case of administrative work performed by bureaucrats. They arealso supposed to gain experience in the front lines of administration. And these front lines areadministered by local government. Accordingly, the importance of the two-way exchange ofpersonnel will increase further, because no organization can be sustained solely by careerbureaucrats who have only meager knowledge of the actual problems on administrative fronts.

Receivers' Benefits

It is unnecessary to emphasize the important role of transferred officials in the localoffice as a pipeline extended from the central government. Benefits, however, are also realizedby the receiver. Through this personnel system, prefectural government can carry out bold anddrastic policy changes, with accountability, if required, ascribed to the “new” staff from the

20 Takenori Inoki

central government. And at the same time, this transfer system can mitigate the personneltension that frequently exists among local staff. The staff from the central government returnto Tokyo after two or three years, and on returning, they leave "great gifts" (new projects orpublic works) to the local government they served.

The host prefecture usually acquires a reliable information pipeline, which may bringabout additional allocation of supplementary budget or promising projects in formulating thebudget, both on the national and the prefectural level. This kind of information pipelinecertainly increases the probability of luring industrial plants or welfare investment to theprefecture concerned. In other words, such a pipeline will be crucial in luring public or privateinvestment, which is expected to have a large economic effect on the regional economy.

Power Dimension

Disbandment of the IM did not represent a complete discontinuation of its power. Itshuman resources and functions were substantially taken over by such ministries as MoHA,MoC, MoL, MoW, the Ministry of Transportation (MoT), and the National Police Agency(NPA). It is perfectly natural that, even after the IM had been dissolved, the human resourcesspread, and remained in each new ministry at the start of the bureaucratic reorganization in1947. And the practice of transferring officials from these new ministries to local governments,once accepted, was generally irreversible. In this case, the prewar power relationship survived,if not completely, in the central-local context.

Another form of the power dimension emerged in the case of a local government thatneeded financial assistance from the central government. Personnel transfers, for instance, mayhave started to save local governments from financial crisis, as in the case of Kitakyûshû-shi,which yielded a number of posts to the bureaucrats from the central ministries (see the largenumber of Kitakyûshû-shi in Table 2. In such a case, it is inevitable that the local governmentconcerned will become subordinate to the central government.

At least through interviews, however, we had the impression that most of thetransferred officials had rather weak voices and powers in administrative decisions in localgovernments, although there is no appropriate indicator to measure the strength of thesepowers. Generally, these transferred bureaucrats are not opinionated when they are working inlocal governments.

There are cases where the local government wants to have staff from the centralgovernment to strengthen or neutralize its administrative machine. This is true, especiallywhen a new governor, in a heated electoral competition, has defeated an incumbent politicalrival whose influence would remain strong in the local government. This balancing of powerstructures in local administrations tends to increase colonized positions in the localgovernment. Furthermore, MoF often uses positions in field offices to promote politicalsupport for the candidate in the constituency of the field office concerned.


Equalizing Functions of Human Resources

As we have seen, the streams run two ways: from central to local, and local to central.This personnel exchange system may be functioning partly to equalize the quality of humanresources in the center-local governmental system. Aptitudes of bureaucrats, as a matter ofcourse, cannot be measured solely by the difficulty of the admission exam. The exam for careerofficials in the central government, however, is extremely difficult compared with otherqualification examinations. If this exam is an effective screening device for human resources,transferring officials from the central to the local governments tends to raise productivitynationwide through the principle of equalization of marginal productivity. In this sense, theloans and transfers policy may have desirable effects on the productivity of human resourceson the national level. Another important outcome is that this system promotes the training oflocal officials in a broader perspective and exposes them to wider opportunities to learn,thereby equalizing human resources in the country.

We turn now to the issue of the transferability of the Japanese practice ofintergovernmental personnel exchange to other countries. Needless to say, we must be carefulin transferring a selected practice or institution from one society to another, because theconditions surrounding or underlying a particular practice may differ markedly from society tosociety. There are, however, a few points worth noting here.

First, this personnel policy indicates a rather high turnover (mobility) of humanresources between the central and local governments. Experience in the local government bothdeepens and widens through a OJT on the front lines of the local administration. Knowledgeand skill acquired through such a training process enriches the careers of staff who are in thispolicy program. The same is also true for the counter-stream from the local to the centralgovernment.

MoHA has recruited young, able officials from local governments on a permanent basisand trained them as non-career bureaucrats. These staff could, therefore, develop better careers,either in MoHA or in the local government. Although this practice began to weaken in the late1970s because of the improved quality of life and human resources in localities, this exchangesystem still plays an equalizing function in human resources in the central and localgovernments.

Second, this personnel exchange provides a broad and reliable screening process. Thestaff tend to be positioned in different offices and to be evaluated by several differentsupervisors (both in local and in central governments). They are trained and exposed to varioustypes of jobs in the two governments, ranging from routine operations, to policy design, tolegislative procedures. Through such a variety of experience, their aptitudes and trainability arediscovered, and the selection process works effectively.

Thus, on the one hand, this personnel exchange policy may in some cases infringe on theautonomy of local government, but on the other, it increases not only the information flow incentral-local relations, but also the efficiency of human resource development of bureaucratsnationwide.

22 Takenori Inoki

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