Political Influence by Corporate Group

There are many analysts maintain that main characters in Japanese government's policy making is not politicians but rather government officials of the central governmental offices at Kasumigaseki. The fact that the Diet, being a legislative body, does not function sufficiently has been publicly known for years. The reason for this dominance of government officials, who are expected to belong to the administration where laws are enforced, comes from the fact that government officials have been taking advantage of the poor working capability of members of the Diet in legislative work and intervening considerably in the process of creating a bill. When we simplify our consideration of this phenomenon, however, we notice the fact that the administration and the legislative body cannot have independent functions. From the viewpoints of foreign countries, it is not surprising that the Japanese political system is a type of a socialistic system.

Most importantly, the government is unable to deliver timely economic policy that foresees the future of the market. This inability has been severely criticized by overseas investors. However, at last the government is recently showing its attitude toward changing the political system which overseas investors can comprehend by reducing wasteful administrative expenditure and restructure the legislative functions.

On the other hand, however, we cannot overlook the substantial influence so far of major corporate groups, as a decision-making system, on both the administration and legislation.

Political Development by Six Major Corporate Groups

As corporate groups in former Zaibatsu (financial group), there are 6 groups having continuous influence on politics. These 6 groups are Mitsui family, Mitsubishi family, Fuyo family (Yasuda group), Sumitomo family, Sanwa family and Ichikan family. Although the total number of these corporate groups accounts only for approximately 8% of the total corporations in the market, these corporate groups possess approximately 25% of stocks in the market. Approximately 38% of the proportion of financing is accounted for by these corporate groups, and approximately 46% of dispatching of executives outside companies is accounted for by these corporate groups. These figures explain a strong dominance relationship held by these corporate groups.

These corporate groups hold regular meetings with participating members such as presidents and chairmen. So far and for long time, these corporate groups have been lending a substantial support to each faction of the Liberal Democratic Party.

Superficially, this support has been taking shape as donations by corporate groups to the Liberal Democratic Party through Japan Federation of Economic Organizations (abbreviated in Japanese as " Keidanren" ) Realistically, particular corporate groupshave been continuously offering supporting activities to particular factions of LDP in various ways. (Please refer to articles in the previous issue.)

At the same time, in an attempt to influence the governmental policy with their opinions, these corporate groups have been proposing their opinions, whether or not official, related to their interest directly to the Prime Minister in the form of "Kondan-kai" ; informal advisory group meeting surrounding the Prime Minister and through economists tightly connected with corporations.

Usefulness of policy-suggesting activities
through think-tank

As an example of policy-suggesting activities by the economic circle directed toward the government is policy-suggesting activities through think-tank. Japan Economic Research Institute, which is a think-tank of the economic circle, has been active in an attempt to influence the government policy with the opinions of the whole economic circle. Japan Economic Research Institute has been making various policy suggestions to successive regimes from Eisaku Sato administration, Takeo Fukuda administration, Masayoshi Oohira administration, Zenko Suzuki administration to recent Kiichi Miyazawa administration.

Additionally specialized committee members of Japan Economic Research Institute usually hold additional memberships in various governmental councils or investigation committees. 　These specialized committee members have been having opportunities to suggest opinions on behalf of the economic circle through such councils and committees. In addition, these specialized committee chairmen have been able to hold

informal advisory meetings at the official residence of the Prime Minister with the Prime Minister to propose directly to the Prime Minister.

Having been acting as exective advisor of JIPR , late Fumio Aoba is one of the founders of Japan Economic Research Institute, and had been emphasizing the usefulness of such a think-tank in practical function. As can be seen in the activity of Japan Economic Research Institute, the corporate groups used to continuously make suggestions regardless of the groups' interest. However, the current emphasis tends to be on putting pressure on factions, various political groups, etc. rather than representing the economic world as a whole.

Future development

Although there is a difference in the degree, it is certain that the major corporate groups will continue to have political influence in the future. However, the techniques over which they have their influence change from the conventional forms to more individualistic forms? Unlike Brookings Research Institute, International Issue Research Institute of Harvard University, The schhol of Advanced International Studies of Johns Hopkins University (SAIS) , private and University-affiliated think-tank in the United States and the Royal Institute of

International affairs in United Kingdom where they have potential to influence the world politics, Japanese research institutes do not make their presence nor have much influence of their opinions and suggestions over the government. Under Obuchi administration, the economic policy conference was established directly under the supervision of the Prime Minister. However the reason that it has not been able to raise the level of expectation of the nation is the nation cannot realize the power in actualizing the policies.

The Keidanren established the 21st Century Public Policy Institute, and started its activity this year. Many of corporate think-tanks such as Mitsubishi Research Institute and Nomura Research Institute have highly valued survey power. More aggressive activity by think-tanks in the economic world that go beyond the realm of individual interest such as Japan Economic Research Institute will be in a strong demand in the future.