MITI and the Japanese miracle

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bined during the MM era. The war also provided the ministry with micro-level intervention powers through its Enterprises Bureau. MITI itself finally resulted from the union of MCI and the apparatus for controlling international trade (the BOT). MITI has never had jurisdiction over transportation, agriculture, construction, labor, or finance, although it has had a strong influence over them, particularly over finance, through such institutions as the Japan Development Bank. The fight over Sahashi's Special Measures Law revolved primarily around MITI's efforts to extend its jurisdiction to cover industrial finance.

It is obviously a controversial matter to define the scope of the pilot agency. MITI's experience suggests that the agency that controls industrial policy needs to combine at least planning, energy, domestic production, international trade, and a share of finance (particularly capital supply and tax policy). MITI's experience also suggests the need not to be doctrinaire; functions can and should be added and subtracted as necessary. The key characteristics of MITI are its small size (the smallest of any of the economic ministries), its indirect control of government funds (thereby freeing it of subservience to the Finance Ministry's Bureau of the Budget), its ''think tank" functions, its vertical bureaus for the implementation of industrial policy at the micro level, and its internal democracy. It has no precise equivalent in any other advanced industrial democracy.

These four elements constitute only a model, and a sketchy one at that. There are obviously numerous social and political consequences of this structure, including normative and philosophical ones, that any society considering adopting it should ponder carefully. As has been said repeatedly, the Japanese did not so much adopt this system of political economy as inherit it. Among its various implications, one in particular should be mentioned; the capitalist developmental state generates a pattern of conflict that differs in many ways from that in other democracies.

Japan's is a system of bureaucratic rule. As S. N. Eisenstadt pointed out more than a generation ago, all known bureaucratic regimes generate two kinds of conflict: struggles within the bureaucracy, and struggles between the bureaucracy and the central political authorities.

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This case study of MITI offers numerous illustrations of each. Jurisdictional disputes among agencies over policy, appropriations, and priorities are the very lifeblood of the Japanese bureaucracy. MCI came into being in part because of a struggle between the agricultural and the industrial bureaucrats. During the 1930's MCI's reform bu-