Japanese public corporations
Encyclopedia
Although the Japanese economy
is largely based on private enterprise, it does have a number of government-owned (public) corporations, which are more extensive and, in some cases, different in function from what exists in the United States
.
, although the extent of direct management and supervision varied. The government divided the national-level corporations into several categories. The first included the main public service and monopoly corporations: Nippon Telegraph and Telephone Public Corporation
, Japanese National Railways
, and Japan Tobacco and Salt Public Corporation (now Japan Tobacco
). However, Nippon Telegraph and Telephone Corporation was privatized in 1985, and the Japanese National Railways in 1987, and Japan Tobacco and Salt Corporation in 1988. The second category included the major development corporations devoted to housing, agriculture, highways, water resources, ports, energy resources, and urban development projects. The Japanese Highway operators were changed into public-owned private corporations in 2005. In 2003, Japan Post
was formed out of the former government-run postal services, but privatization is still pending and a major issue in Japanese politics.
Other categories of corporations included those charged with special government projects, loans and finance, and special types of banking. Local public corporations were involved with utilities.
Public corporations benefited the economy in several ways. Some, like Nippon Telegraph and Telephone Corporation before privatization, were important sources of technology development funds or centers around which private industry could cluster. Others provided vital public services that private industry would find impossible to finance. The development banks, particularly the Japan Development Bank, were sources of long-term investment funds and instrumental in shaping the pattern of industry, especially in the early postwar period. Because public corporations also added revenue to the national budget and were, theoretically, selffinancing , they required little from the government in the way of financial support. They also provided employment for retired bureaucrats. The reemployment of retired bureaucrats as advisers to these corporations as well as to many private-sector firms was rather common, especially in the late 1960s and early 1970s, under the title amakudari
(descent from heaven). The practice was most prevalent in the highly regulated banking, steel, and transportation industries but was also found throughout the Japanese economy.
Public corporations also have a negative side. Their operations are apt to be less efficient than those of the private sector[speculation], and in some corporations, close government supervision impedes corporate responsibility. Conflicts between corporate heads, who are retired from competing ministries, and envy among career employees, who see their advancement blocked by the influx of retired officials, also creates frequent management problems. Labor relations are also less harmonious in the public sector than in the private sector. Some of Japan's most debilitating strikes
and work slowdowns have been launched by public transportation workers.
Economy of Japan
The economy of Japan, a free market economy, is the third largest in the world after the United States and the People's Republic of China, and ahead of Germany at 4th...
is largely based on private enterprise, it does have a number of government-owned (public) corporations, which are more extensive and, in some cases, different in function from what exists in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
History
In 1988 there were ninety-seven public corporations, reduced from 111 in the early 1980s as a result of administrative reforms. Public companies at the national level were normally affiliated with one of the economic ministriesMinistry of Economy, Trade and Industry (Japan)
The or METI, is a ministry of the Government of Japan. It was created by the 2001 Central Government Reform when the Ministry of International Trade and Industry merged with agencies from other ministries related to economic activities, such as the Economic Planning Agency.METI, which used to be...
, although the extent of direct management and supervision varied. The government divided the national-level corporations into several categories. The first included the main public service and monopoly corporations: Nippon Telegraph and Telephone Public Corporation
Nippon Telegraph and Telephone
, commonly known as NTT, is a Japanese telecommunications company headquartered in Tokyo, Japan. Ranked the 31st in Fortune Global 500, NTT is the largest telecommunications company in Asia, and the second-largest in the world in terms of revenue....
, Japanese National Railways
Japanese National Railways
, abbreviated or "JNR", was the national railway network of Japan from 1949 to 1987.-History:The term Kokuyū Tetsudō "state-owned railway" originally referred to a network of railway lines operated by nationalized companies under the control of the Railway Institute following the nationalization...
, and Japan Tobacco and Salt Public Corporation (now Japan Tobacco
Japan Tobacco
, abbreviated JT, is a cigarette manufacturing company. It is part of the Nikkei 225 index. In 2009 the company was listed at number 312 on the Fortune 500 list. The company is headquartered in Toranomon, Minato, Tokyo. The international headquarters are in Geneva, Switzerland.-History:The company...
). However, Nippon Telegraph and Telephone Corporation was privatized in 1985, and the Japanese National Railways in 1987, and Japan Tobacco and Salt Corporation in 1988. The second category included the major development corporations devoted to housing, agriculture, highways, water resources, ports, energy resources, and urban development projects. The Japanese Highway operators were changed into public-owned private corporations in 2005. In 2003, Japan Post
Japan Post
was a government-owned corporation in Japan, that existed from 2003–2007, offering postal and package delivery services, banking services, and life insurance. It had over 400,000 employees and ran 24,700 post offices throughout Japan and was the nation's largest employer. One third of all Japanese...
was formed out of the former government-run postal services, but privatization is still pending and a major issue in Japanese politics.
Other categories of corporations included those charged with special government projects, loans and finance, and special types of banking. Local public corporations were involved with utilities.
Public corporations benefited the economy in several ways. Some, like Nippon Telegraph and Telephone Corporation before privatization, were important sources of technology development funds or centers around which private industry could cluster. Others provided vital public services that private industry would find impossible to finance. The development banks, particularly the Japan Development Bank, were sources of long-term investment funds and instrumental in shaping the pattern of industry, especially in the early postwar period. Because public corporations also added revenue to the national budget and were, theoretically, selffinancing , they required little from the government in the way of financial support. They also provided employment for retired bureaucrats. The reemployment of retired bureaucrats as advisers to these corporations as well as to many private-sector firms was rather common, especially in the late 1960s and early 1970s, under the title amakudari
Amakudari
is the institutionalised practice where Japanese senior bureaucrats retire to high-profile positions in the private and public sectors. The practice is increasingly viewed as corrupt and a drag on unfastening the ties between private sector and state which prevent economic and political...
(descent from heaven). The practice was most prevalent in the highly regulated banking, steel, and transportation industries but was also found throughout the Japanese economy.
Public corporations also have a negative side. Their operations are apt to be less efficient than those of the private sector[speculation], and in some corporations, close government supervision impedes corporate responsibility. Conflicts between corporate heads, who are retired from competing ministries, and envy among career employees, who see their advancement blocked by the influx of retired officials, also creates frequent management problems. Labor relations are also less harmonious in the public sector than in the private sector. Some of Japan's most debilitating strikes
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
and work slowdowns have been launched by public transportation workers.