20 July 2007

Japanese bureaucracy, continued

How did it come about that the Japanese ceded so much power to the bureaucrats (see my previous post)? More from: Dogs and Demons: the Fall of Modern Japan:
Before World War II, the bureaucrats had already consolidated power but had to share it with the armed forces and the big zaibatsu business cartels. After the war, with the army and the zaibatsu discredited, politicians, the press, and the public consigned their fate to bureaucrats, allowing them near-dictatorial powers and asking no questions. For a while, the system worked reasonably well....
Alex Kerr gives a full account of the damage that the bureaucrats are now doing, but the Japanese bureaucrats seem to have entrenched their power so deeply and pervasively that any change will occur only very late in the day, and is likely to be very stressful. The worry is that it is not just Japan; that the influence of government and big business, acting together as they generally do, is becoming as self-entrenching in the west as in Japan. That may sound far-fetched but a single mad policy, the Common Agricultural Policy, has already done much to devastate the physical and social environment of the European Union's rural sector. It is still, decades after its faults were clearly identified, transferring wealth from the poor to the rich, and wasting billions of taxpayer and consumer dollars.

In that instance at least, there is nothing intrinsically self-limiting in bureaucrats' powers. Perhaps it's the comparatively small size of agriculture in Europe that allows it to continue to be subsidised in this corrupt, insane manner. While the CAP costs billions of dollars, it still represents only a small proportion of the EU's Gross Domestic Product. But it, and other perverse subsidies - or rather, their persistence in the face of widespread knowledge of their perversity - should be a warning. We need mechanisms that terminate failed policies rather than entrench them.

My suggestion, Social Policy Bonds, would do that by subordinating activities and funding to explicit, targeted, verifiable outcomes, rather than vaguely expressed declarations of intent that can easily be ignored.

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