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The changing nature of the "Iron Triangle" phenomenon: a case study of the "Iron Triangle" in the postal industry and postal reforms in Japan

Rakhmanko, Alena (2015) In Working papers in contemporary Asian studies
Abstract
The “iron triangle” phenomenon, or nexus between politicians, bureaucrats and business, is an important element of the Japanese postwar political economy system, known as the “1955 system” or “Japan Inc.” Although, originally created to facilitate high-speed economic growth by ensuring

efficient cooperation between the government and business, over time it became associated with high-profile corruption and massive government spending on economically unnecessary projects that increased Japan’s public debt. The “iron triangle” in the postal industry was particularly important

because it was directly linked to the postal savings funds, the source of money that financed “iron triangles” in other sectors of the Japanese... (More)
The “iron triangle” phenomenon, or nexus between politicians, bureaucrats and business, is an important element of the Japanese postwar political economy system, known as the “1955 system” or “Japan Inc.” Although, originally created to facilitate high-speed economic growth by ensuring

efficient cooperation between the government and business, over time it became associated with high-profile corruption and massive government spending on economically unnecessary projects that increased Japan’s public debt. The “iron triangle” in the postal industry was particularly important

because it was directly linked to the postal savings funds, the source of money that financed “iron triangles” in other sectors of the Japanese economy. Extensive reforms of the postal sector undertaken in Japan in 2001 have changed the mechanism of the postal “iron triangle” and created serious

implications for its actors. The purpose of this study was to explore the process of transformation of the postal “iron triangle” relationships due to the influence of the postal reforms (FILP reform and privatization reform). It found that as a result of these reforms, the “iron triangle” relationships in the

postal industry have weakened to a considerable degree. Particularly, two sides of the triangle became negatively affected by the postal privatization: politicians-postmasters and politicians-bureaucrats alliances. At the same time, the bureaucracy-business connection appears to remain resistant and viable.

The study further explained the transformation process as a result of declining efficiency and effectiveness of the “iron triangle” as an organization. It discovered that the two sides of the postal “iron triangle” have weakened

because all the three factors of their efficiency and effectiveness (well-balanced incentive structure; information and knowledge symmetry; and high degree of adaptability) were eliminated by the postal reforms. However, the third side of

the postal “iron triangle” remained strong because all the three factors of its efficiency and effectiveness were not affected by the postal reforms. (Less)
Please use this url to cite or link to this publication:
author
publishing date
type
Working Paper
publication status
published
subject
keywords
Adaptability, Amakudari, Bureaucrats, Collusion, Corruption, Effectiveness, Efficiency, Fiscal Investment and Loan Program (FILP), Incentives, Iron Triangle, Japan, Japan Post, Knowledge, Organization, Politicians, Postal Savings, Postal Privatization, Postmasters.
in
Working papers in contemporary Asian studies
issue
44
pages
88 pages
publisher
Centre for East and South-East Asian Studies, Lund University
ISSN
1652-4128
ISBN
978-91-980900-4-8
language
English
LU publication?
no
id
98aeed38-2002-42cd-baa3-c3948ffa51b7 (old id 5050908)
date added to LUP
2015-02-17 15:15:50
date last changed
2016-06-29 08:57:28
@misc{98aeed38-2002-42cd-baa3-c3948ffa51b7,
  abstract     = {The “iron triangle” phenomenon, or nexus between politicians, bureaucrats and business, is an important element of the Japanese postwar political economy system, known as the “1955 system” or “Japan Inc.” Although, originally created to facilitate high-speed economic growth by ensuring<br/><br>
efficient cooperation between the government and business, over time it became associated with high-profile corruption and massive government spending on economically unnecessary projects that increased Japan’s public debt. The “iron triangle” in the postal industry was particularly important<br/><br>
because it was directly linked to the postal savings funds, the source of money that financed “iron triangles” in other sectors of the Japanese economy. Extensive reforms of the postal sector undertaken in Japan in 2001 have changed the mechanism of the postal “iron triangle” and created serious<br/><br>
implications for its actors. The purpose of this study was to explore the process of transformation of the postal “iron triangle” relationships due to the influence of the postal reforms (FILP reform and privatization reform). It found that as a result of these reforms, the “iron triangle” relationships in the<br/><br>
postal industry have weakened to a considerable degree. Particularly, two sides of the triangle became negatively affected by the postal privatization: politicians-postmasters and politicians-bureaucrats alliances. At the same time, the bureaucracy-business connection appears to remain resistant and viable.<br/><br>
The study further explained the transformation process as a result of declining efficiency and effectiveness of the “iron triangle” as an organization. It discovered that the two sides of the postal “iron triangle” have weakened<br/><br>
because all the three factors of their efficiency and effectiveness (well-balanced incentive structure; information and knowledge symmetry; and high degree of adaptability) were eliminated by the postal reforms. However, the third side of<br/><br>
the postal “iron triangle” remained strong because all the three factors of its efficiency and effectiveness were not affected by the postal reforms.},
  author       = {Rakhmanko, Alena},
  isbn         = {978-91-980900-4-8},
  issn         = {1652-4128},
  keyword      = {Adaptability,Amakudari,Bureaucrats,Collusion,Corruption,Effectiveness,Efficiency,Fiscal Investment and Loan Program (FILP),Incentives,Iron Triangle,Japan,Japan Post,Knowledge,Organization,Politicians,Postal Savings,Postal Privatization,Postmasters.},
  language     = {eng},
  note         = {Working Paper},
  number       = {44},
  pages        = {88},
  publisher    = {Centre for East and South-East Asian Studies, Lund University},
  series       = {Working papers in contemporary Asian studies},
  title        = {The changing nature of the "Iron Triangle" phenomenon: a case study of the "Iron Triangle" in the postal industry and postal reforms in Japan},
  year         = {2015},
}