Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0008
- Subject:
- Political Science, Political Economy
The Ministry of Finance (MOF) has occupied a commanding and dominating position in fiscal, financial, and economic policy-making in Japan. However, by the end of the 20th century, the MOF's formal ...
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The Ministry of Finance (MOF) has occupied a commanding and dominating position in fiscal, financial, and economic policy-making in Japan. However, by the end of the 20th century, the MOF's formal powers were being eroded, the reputation of its elite administrators for honest and effective management of the economy tarnished by scandal and ineptitude, and its authority and influence in central government challenged by other organizations. This chapter outlines the structure, functions, and organization of the MOF, its constituent bureaux, and its advisory councils. Particular attention is drawn to the central role of the Budget Bureau and the Minister's Secretariat, and to the processes for the coordination of budgetary and other policy-making through them and other mechanisms. It describes the boundaries of the ministry's supervisory jurisdiction, within which were to be found several of the most important public banks and finance corporations. This chapter argues that in the 1990s, the MOF suffered a crisis of confidence and authority, and traces the origins of the erosion of its formal powers in the reorganization of the central executive in January 2001.Less
The Ministry of Finance (MOF) has occupied a commanding and dominating position in fiscal, financial, and economic policy-making in Japan. However, by the end of the 20th century, the MOF's formal powers were being eroded, the reputation of its elite administrators for honest and effective management of the economy tarnished by scandal and ineptitude, and its authority and influence in central government challenged by other organizations. This chapter outlines the structure, functions, and organization of the MOF, its constituent bureaux, and its advisory councils. Particular attention is drawn to the central role of the Budget Bureau and the Minister's Secretariat, and to the processes for the coordination of budgetary and other policy-making through them and other mechanisms. It describes the boundaries of the ministry's supervisory jurisdiction, within which were to be found several of the most important public banks and finance corporations. This chapter argues that in the 1990s, the MOF suffered a crisis of confidence and authority, and traces the origins of the erosion of its formal powers in the reorganization of the central executive in January 2001.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0016
- Subject:
- Political Science, Political Economy
In Japan, ministries and agencies submitted budget requests for shares of the General Account Budget to the Ministry of Finance (MOF) on 31 August each year. Their processes of internal compilation ...
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In Japan, ministries and agencies submitted budget requests for shares of the General Account Budget to the Ministry of Finance (MOF) on 31 August each year. Their processes of internal compilation were concerned with two main issues: the budget limit or ceiling agreed informally with the Budget Bureau prior to submission, and, within that ceiling, the allocation of shares to each bureau, and to the programmes, projects, and items of spending of their policy divisions. Those issues were articulated through four linked and overlapping processes: first, the evolution, preparation, discussion, and negotiation of budget proposals within and between the policy divisions of each bureau; second, the examination of those proposals by the ministry's Budget and Accounts Division, and its negotiations with divisions and bureaux; third, and concurrently, the ministry's Budget and Accounts Division's informal negotiations with the MOF's Budget Bureau of that probable budget ceiling (that is, its putative share of the total of the planned General Account Budget); and, finally, the preparation and legitimation of formal budget requests.Less
In Japan, ministries and agencies submitted budget requests for shares of the General Account Budget to the Ministry of Finance (MOF) on 31 August each year. Their processes of internal compilation were concerned with two main issues: the budget limit or ceiling agreed informally with the Budget Bureau prior to submission, and, within that ceiling, the allocation of shares to each bureau, and to the programmes, projects, and items of spending of their policy divisions. Those issues were articulated through four linked and overlapping processes: first, the evolution, preparation, discussion, and negotiation of budget proposals within and between the policy divisions of each bureau; second, the examination of those proposals by the ministry's Budget and Accounts Division, and its negotiations with divisions and bureaux; third, and concurrently, the ministry's Budget and Accounts Division's informal negotiations with the MOF's Budget Bureau of that probable budget ceiling (that is, its putative share of the total of the planned General Account Budget); and, finally, the preparation and legitimation of formal budget requests.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0009
- Subject:
- Political Science, Political Economy
Japan's elite bureaucrats have five defining characteristics. First, their recruitment is open and competitive, but those appointed are drawn predominantly from among the graduates of Tokyo ...
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Japan's elite bureaucrats have five defining characteristics. First, their recruitment is open and competitive, but those appointed are drawn predominantly from among the graduates of Tokyo University's Law Faculty. Second, those recruited are generalists who dominate the elite bureaucracy in headquarters ministries. Third, bureau and ministry interests are stronger than national, centralizing tendencies; most bureaucrats serve the whole of their official life in the same ministry or agency. Fourth, behavioural norms of seniority, and rotation of posts, provide for the strictly regulated progression of class-cohorts with broadly based experience, mainly within ministries, up to the level of deputy director of division. Fifth, officials passed over for promotion at more senior levels in headquarters ministries resign; most, together with some other retirees, seek (with the assistance of their ministry) ‘second careers’ elsewhere in the public and private sectors, and in the Diet. This chapter looks at the recruitment, socialization, career progression, and retirement of the Ministry of Finance's elite administrators, within the context of those five broad characteristics.Less
Japan's elite bureaucrats have five defining characteristics. First, their recruitment is open and competitive, but those appointed are drawn predominantly from among the graduates of Tokyo University's Law Faculty. Second, those recruited are generalists who dominate the elite bureaucracy in headquarters ministries. Third, bureau and ministry interests are stronger than national, centralizing tendencies; most bureaucrats serve the whole of their official life in the same ministry or agency. Fourth, behavioural norms of seniority, and rotation of posts, provide for the strictly regulated progression of class-cohorts with broadly based experience, mainly within ministries, up to the level of deputy director of division. Fifth, officials passed over for promotion at more senior levels in headquarters ministries resign; most, together with some other retirees, seek (with the assistance of their ministry) ‘second careers’ elsewhere in the public and private sectors, and in the Diet. This chapter looks at the recruitment, socialization, career progression, and retirement of the Ministry of Finance's elite administrators, within the context of those five broad characteristics.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0017
- Subject:
- Political Science, Political Economy
After Cabinet approved the budget strategy, and ministries and agencies were informed of their ceilings in June or July, the initiative within the Budget Bureau passed to the budget examiners and ...
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After Cabinet approved the budget strategy, and ministries and agencies were informed of their ceilings in June or July, the initiative within the Budget Bureau passed to the budget examiners and deputy budget examiners. The broad aim was to deliver by December a draft Ministry of Finance budget within the budget ceiling, and consistent with the guidelines approved by Cabinet for the different categories of expenditure. There were four main stages of compilation following the formal submission of budget requests at the end of August: the hearings, examination, negotiations, and ‘revival negotiations’.Less
After Cabinet approved the budget strategy, and ministries and agencies were informed of their ceilings in June or July, the initiative within the Budget Bureau passed to the budget examiners and deputy budget examiners. The broad aim was to deliver by December a draft Ministry of Finance budget within the budget ceiling, and consistent with the guidelines approved by Cabinet for the different categories of expenditure. There were four main stages of compilation following the formal submission of budget requests at the end of August: the hearings, examination, negotiations, and ‘revival negotiations’.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0012
- Subject:
- Political Science, Political Economy
Japan's Fiscal Investment Loan Programme (FILP), also known as the second budget, was a policy-based public finance system through which traditionally the national government transmitted the ...
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Japan's Fiscal Investment Loan Programme (FILP), also known as the second budget, was a policy-based public finance system through which traditionally the national government transmitted the accumulated savings of small investors to dedicated governmental and quasi-governmental organizations for investment in projects and programmes designed to achieve prescribed national economic and social (and party political) objectives. Since its inception in 1953, FILP has been characterized, first, by the unique source of its funds, and the control of their allocation by the Ministry of Finance for the development of economic, industrial, and social infrastructure; second, by the methods of financing capital projects and programmes through investments, loans, and the underwriting of bonds issued by a number of eligible national, regional, and local organizations; and, third, by the provision of loans and subsidies to some Special Accounts, and the General Account Budget itself.Less
Japan's Fiscal Investment Loan Programme (FILP), also known as the second budget, was a policy-based public finance system through which traditionally the national government transmitted the accumulated savings of small investors to dedicated governmental and quasi-governmental organizations for investment in projects and programmes designed to achieve prescribed national economic and social (and party political) objectives. Since its inception in 1953, FILP has been characterized, first, by the unique source of its funds, and the control of their allocation by the Ministry of Finance for the development of economic, industrial, and social infrastructure; second, by the methods of financing capital projects and programmes through investments, loans, and the underwriting of bonds issued by a number of eligible national, regional, and local organizations; and, third, by the provision of loans and subsidies to some Special Accounts, and the General Account Budget itself.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0013
- Subject:
- Political Science, Political Economy
The Ministry of Finance reacted to the emergence of the fiscal crisis in 1975 by prescribing three related policy aims: to devise and implement a strategy to change the structure of Japan's tax ...
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The Ministry of Finance reacted to the emergence of the fiscal crisis in 1975 by prescribing three related policy aims: to devise and implement a strategy to change the structure of Japan's tax system so as to provide a more stable and productive source of revenue; to constrain the growth of public spending; and to reduce and, if possible, eliminate the fiscal deficit, and with it the rising costs of government debt. Over the following twenty-five years, those aims were translated into specific short and medium-term policy objectives, refined and adjusted contingently to accord with conjunctural changes in the economy and the polity. This chapter explains the origins and evolution of those objectives, and describes the formulation of policies, and the process of ‘policy succession’, to achieve them. The fiscal reconstruction of 1976–87, fiscal consolidation of 1987–91, fiscal reform in 1996–98, and fiscal explosion in 1998–2000 are discussed.Less
The Ministry of Finance reacted to the emergence of the fiscal crisis in 1975 by prescribing three related policy aims: to devise and implement a strategy to change the structure of Japan's tax system so as to provide a more stable and productive source of revenue; to constrain the growth of public spending; and to reduce and, if possible, eliminate the fiscal deficit, and with it the rising costs of government debt. Over the following twenty-five years, those aims were translated into specific short and medium-term policy objectives, refined and adjusted contingently to accord with conjunctural changes in the economy and the polity. This chapter explains the origins and evolution of those objectives, and describes the formulation of policies, and the process of ‘policy succession’, to achieve them. The fiscal reconstruction of 1976–87, fiscal consolidation of 1987–91, fiscal reform in 1996–98, and fiscal explosion in 1998–2000 are discussed.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0021
- Subject:
- Political Science, Political Economy
In Japan, fiscal (and other) policies were used by the government to influence the supply and demand for goods and services in the economy, through changes in corporate and personal taxation, public ...
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In Japan, fiscal (and other) policies were used by the government to influence the supply and demand for goods and services in the economy, through changes in corporate and personal taxation, public investment, subsidies, and welfare payments. Both then and more generally, through the annual General Account and Fiscal Investment Loan Programme Budgets, it distributed benefits and imposed burdens differentially on economic and social groups, clienteles, and individuals. Who and what won and lost in the central budgetary processes were determined mainly by the size, composition, and distribution of the mandatory and discretionary expenditures in the General Account and Supplementary Budgets. This chapter evaluates the Ministry of Finance's performance in delivering a budget total of general expenditures in December within the ceiling prescribed six months earlier—in short, the extent to which it won or lost in the autumnal bilateral negotiations with Spending Ministries and Agencies. It also looks at the changes in the distribution of current and capital spending as the policies of fiscal reconstruction, consolidation, and expansion were implemented.Less
In Japan, fiscal (and other) policies were used by the government to influence the supply and demand for goods and services in the economy, through changes in corporate and personal taxation, public investment, subsidies, and welfare payments. Both then and more generally, through the annual General Account and Fiscal Investment Loan Programme Budgets, it distributed benefits and imposed burdens differentially on economic and social groups, clienteles, and individuals. Who and what won and lost in the central budgetary processes were determined mainly by the size, composition, and distribution of the mandatory and discretionary expenditures in the General Account and Supplementary Budgets. This chapter evaluates the Ministry of Finance's performance in delivering a budget total of general expenditures in December within the ceiling prescribed six months earlier—in short, the extent to which it won or lost in the autumnal bilateral negotiations with Spending Ministries and Agencies. It also looks at the changes in the distribution of current and capital spending as the policies of fiscal reconstruction, consolidation, and expansion were implemented.
Johan Christensen
- Published in print:
- 2017
- Published Online:
- September 2017
- ISBN:
- 9781503600492
- eISBN:
- 9781503601857
- Item type:
- chapter
- Publisher:
- Stanford University Press
- DOI:
- 10.11126/stanford/9781503600492.003.0005
- Subject:
- Sociology, Economic Sociology
Contrary to conventional notions about social-democratic tax policies, Norway adopted a major market-oriented reform of taxation in the early 1990s. This chapter connects this surprising turn toward ...
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Contrary to conventional notions about social-democratic tax policies, Norway adopted a major market-oriented reform of taxation in the early 1990s. This chapter connects this surprising turn toward market principles to the role of economists within the Norwegian state. Economists were granted a powerful position in the bureaucracy during the Keynesian era. Paradoxically, the close links established between the finance ministry and the economics discipline in this period made the bureaucracy highly receptive to the later shift toward neoclassical economics. New economic ideas were brought into the ministry by U.S–trained economists hired to key positions in the organization. This spurred the formulation and advocacy of a broad efficiency–oriented reform program, which had a major impact on the economic policies enacted by Norwegian governments from the late 1980s onwards.Less
Contrary to conventional notions about social-democratic tax policies, Norway adopted a major market-oriented reform of taxation in the early 1990s. This chapter connects this surprising turn toward market principles to the role of economists within the Norwegian state. Economists were granted a powerful position in the bureaucracy during the Keynesian era. Paradoxically, the close links established between the finance ministry and the economics discipline in this period made the bureaucracy highly receptive to the later shift toward neoclassical economics. New economic ideas were brought into the ministry by U.S–trained economists hired to key positions in the organization. This spurred the formulation and advocacy of a broad efficiency–oriented reform program, which had a major impact on the economic policies enacted by Norwegian governments from the late 1980s onwards.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0025
- Subject:
- Political Science, Political Economy
The main objective of the Ministry of Finance (MOF) from the emergence of the fiscal crisis in 1975 onwards was to reduce the fiscal deficit on the General Account Budget and, in the longer term, to ...
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The main objective of the Ministry of Finance (MOF) from the emergence of the fiscal crisis in 1975 onwards was to reduce the fiscal deficit on the General Account Budget and, in the longer term, to eliminate it, as well as restore the balanced-budget characteristics that prevailed in the high-growth era. This chapter assesses the MOF's claim to have made substantial progress towards the achievement of that aim by the end of the 1980s, until the onset of economic recession in the early 1990s first slowed then halted that progress, and ultimately reversed it as the economic imperatives triggered more public spending, higher levels of government borrowing, and tax cuts and concessions. It analyses and assesses the effects and effectiveness of the policies that the MOF initiated, and attempted to implement, under the broad banners of fiscal reconstruction and fiscal consolidation in the 1980s and early 1990s, and the counter-cyclical expansionary policies that succeeded them in the recessionary conditions that prevailed for most of the remainder of the decade.Less
The main objective of the Ministry of Finance (MOF) from the emergence of the fiscal crisis in 1975 onwards was to reduce the fiscal deficit on the General Account Budget and, in the longer term, to eliminate it, as well as restore the balanced-budget characteristics that prevailed in the high-growth era. This chapter assesses the MOF's claim to have made substantial progress towards the achievement of that aim by the end of the 1980s, until the onset of economic recession in the early 1990s first slowed then halted that progress, and ultimately reversed it as the economic imperatives triggered more public spending, higher levels of government borrowing, and tax cuts and concessions. It analyses and assesses the effects and effectiveness of the policies that the MOF initiated, and attempted to implement, under the broad banners of fiscal reconstruction and fiscal consolidation in the 1980s and early 1990s, and the counter-cyclical expansionary policies that succeeded them in the recessionary conditions that prevailed for most of the remainder of the decade.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0004
- Subject:
- Political Science, Political Economy
The fiscal crisis experienced in Japan from the mid-1970s gave rise to a broadly based campaign of administrative reform associated with the work of the Second Provisional Commission for ...
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The fiscal crisis experienced in Japan from the mid-1970s gave rise to a broadly based campaign of administrative reform associated with the work of the Second Provisional Commission for Administrative Reform, launched in 1981. This chapter assesses the extent to which the administrative reform movement in the 1980s changed the administrative context within which the central budgetary system was operated in Japan. It also examines the re-emergence in the 1990s of administrative reform as a political issue on the agenda of successive coalition governments, together with the broadening of the reform agenda in Prime Minister Ryutaro Hashimoto's six ‘visions’. The chapter argues that the conditions of persistent fiscal crisis in the 1980s did not act as a catalyst for a radical re-conceptualization of the role and purpose of the public sector in Japan comparable to that which occurred elsewhere in other G7 countries at that time, and explains why its structure and organization remained relatively unchanged throughout the last quarter of the 20th century.Less
The fiscal crisis experienced in Japan from the mid-1970s gave rise to a broadly based campaign of administrative reform associated with the work of the Second Provisional Commission for Administrative Reform, launched in 1981. This chapter assesses the extent to which the administrative reform movement in the 1980s changed the administrative context within which the central budgetary system was operated in Japan. It also examines the re-emergence in the 1990s of administrative reform as a political issue on the agenda of successive coalition governments, together with the broadening of the reform agenda in Prime Minister Ryutaro Hashimoto's six ‘visions’. The chapter argues that the conditions of persistent fiscal crisis in the 1980s did not act as a catalyst for a radical re-conceptualization of the role and purpose of the public sector in Japan comparable to that which occurred elsewhere in other G7 countries at that time, and explains why its structure and organization remained relatively unchanged throughout the last quarter of the 20th century.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0003
- Subject:
- Political Science, Political Economy
This chapter provides a general overview of the evolution of Japan's political economy and signals some of the main changes from the emergence of the fiscal crisis in fiscal year 1975 to the ...
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This chapter provides a general overview of the evolution of Japan's political economy and signals some of the main changes from the emergence of the fiscal crisis in fiscal year 1975 to the beginning of the new millennium. It examines the formal and informal budget institutions, the processes and policies with which the Ministry of Finance and successive Liberal Democratic Party (LDP) governments responded to that crisis, and the conditions of continuing fiscal stress in the following two decades. It begins with the broad outline of the main economic trends: in summary, a period that began with the recognition of fiscal crisis, followed by years of proclaimed fiscal austerity in the early 1980s. The main trends in the political system are also discussed, focusing particularly on the role and significance of the LDP, along with the interdependence of the economy and the polity.Less
This chapter provides a general overview of the evolution of Japan's political economy and signals some of the main changes from the emergence of the fiscal crisis in fiscal year 1975 to the beginning of the new millennium. It examines the formal and informal budget institutions, the processes and policies with which the Ministry of Finance and successive Liberal Democratic Party (LDP) governments responded to that crisis, and the conditions of continuing fiscal stress in the following two decades. It begins with the broad outline of the main economic trends: in summary, a period that began with the recognition of fiscal crisis, followed by years of proclaimed fiscal austerity in the early 1980s. The main trends in the political system are also discussed, focusing particularly on the role and significance of the LDP, along with the interdependence of the economy and the polity.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0018
- Subject:
- Political Science, Political Economy
This chapter examines the rules-of-the-game that governed the Japanese Ministry of Finance's (MOF) relationships with the Spending Ministries and Agencies, and what norms of behaviour guided Budget ...
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This chapter examines the rules-of-the-game that governed the Japanese Ministry of Finance's (MOF) relationships with the Spending Ministries and Agencies, and what norms of behaviour guided Budget Bureau officials in their interactions with opposite numbers. First, there were the general bureaucratic norms or universal principles that guided bureaucratic conduct, embedded historically in the institution of bureaucracy. Second, within the general contours described by such norms were those that distinguished the behaviour of MOF officials from those in other ministries and agencies, the distinctive habits and customs of work, and standard operating procedures. Third, within the contours of those ministry norms, and the more universal bureaucratic ones, were the specific norms of behaviour, which guided and regulated the conduct of officials in the Budget Bureau compared with their colleagues in, say, the Tax Bureau or (until 1998) the Banking Bureau and Securities Bureau.Less
This chapter examines the rules-of-the-game that governed the Japanese Ministry of Finance's (MOF) relationships with the Spending Ministries and Agencies, and what norms of behaviour guided Budget Bureau officials in their interactions with opposite numbers. First, there were the general bureaucratic norms or universal principles that guided bureaucratic conduct, embedded historically in the institution of bureaucracy. Second, within the general contours described by such norms were those that distinguished the behaviour of MOF officials from those in other ministries and agencies, the distinctive habits and customs of work, and standard operating procedures. Third, within the contours of those ministry norms, and the more universal bureaucratic ones, were the specific norms of behaviour, which guided and regulated the conduct of officials in the Budget Bureau compared with their colleagues in, say, the Tax Bureau or (until 1998) the Banking Bureau and Securities Bureau.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0011
- Subject:
- Political Science, Political Economy
The formal institutions and structures of Japan's budgetary system are complex; the processes of making budgets through them labyrinthine and opaque. The proliferation of the number and different ...
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The formal institutions and structures of Japan's budgetary system are complex; the processes of making budgets through them labyrinthine and opaque. The proliferation of the number and different types of budgets and accounts is partly an historical legacy of the creation of the modern state after the Meiji Restoration, when many of them were established, and used explicitly as instruments of national economic development. There are two main central government budgets: the General Account Budget and the so-called second budget, the Fiscal Investment and Loan Programme. Both budgets are revised in-year, and revisions are incorporated in one or more Supplementary Budgets. There are, besides, the budgets of public banks and finance corporations, compiled under the sole or shared supervisory jurisdiction of the Ministry of Finance, and those of other public corporations and special companies, supervised by various Spending Ministries and Agencies. Finally, there are thirty-eight Special Accounts, established by law to manage the revenues and expenditures of specific government activities or special projects.Less
The formal institutions and structures of Japan's budgetary system are complex; the processes of making budgets through them labyrinthine and opaque. The proliferation of the number and different types of budgets and accounts is partly an historical legacy of the creation of the modern state after the Meiji Restoration, when many of them were established, and used explicitly as instruments of national economic development. There are two main central government budgets: the General Account Budget and the so-called second budget, the Fiscal Investment and Loan Programme. Both budgets are revised in-year, and revisions are incorporated in one or more Supplementary Budgets. There are, besides, the budgets of public banks and finance corporations, compiled under the sole or shared supervisory jurisdiction of the Ministry of Finance, and those of other public corporations and special companies, supervised by various Spending Ministries and Agencies. Finally, there are thirty-eight Special Accounts, established by law to manage the revenues and expenditures of specific government activities or special projects.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0014
- Subject:
- Political Science, Political Economy
In Japan, the general context of budget-making, up to the Cabinet's approval of the Ministry of Finance's draft budgets for both the General Account Budget and the Fiscal Investment Loan Programme in ...
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In Japan, the general context of budget-making, up to the Cabinet's approval of the Ministry of Finance's draft budgets for both the General Account Budget and the Fiscal Investment Loan Programme in December, was shaped by a combination of short-term and medium-term political and economic factors. The medium-term context was set by the five-year National Economic Plan and the Medium Term Fiscal Projection. Revised and rolled forward each year, the latter provided stylized projections of aggregate expenditures and revenues for the upcoming fiscal year and three years ahead, based mainly on the (equally stylized) economic growth assumptions in the National Economic Plan. The shorter-term macroeconomic context was provided mainly by the annual estimates of GDP (and other key economic variables), and the consequential projections of revenue and borrowing.Less
In Japan, the general context of budget-making, up to the Cabinet's approval of the Ministry of Finance's draft budgets for both the General Account Budget and the Fiscal Investment Loan Programme in December, was shaped by a combination of short-term and medium-term political and economic factors. The medium-term context was set by the five-year National Economic Plan and the Medium Term Fiscal Projection. Revised and rolled forward each year, the latter provided stylized projections of aggregate expenditures and revenues for the upcoming fiscal year and three years ahead, based mainly on the (equally stylized) economic growth assumptions in the National Economic Plan. The shorter-term macroeconomic context was provided mainly by the annual estimates of GDP (and other key economic variables), and the consequential projections of revenue and borrowing.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0029
- Subject:
- Political Science, Political Economy
Japan's main budget exhibited three symptoms of fiscal stress from 1975 through to 2000. First, a recurring deficit, persisting throughout the business cycle, that is, including years of both ...
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Japan's main budget exhibited three symptoms of fiscal stress from 1975 through to 2000. First, a recurring deficit, persisting throughout the business cycle, that is, including years of both economic growth and decline. Second, an increasing level of outstanding debt. Third, rising costs of servicing that debt, pre-empting an increasing share of the total budget, and squeezing the amount of mandatory and discretionary programme expenditures. Those symptoms of acute fiscal stress first appeared in 1974–5, when the Ministry of Finance was forced to borrow to cover the costs of fast rising current expenditure in the ‘welfare era’ inaugurated in fiscal year 1973, and the slowdown in the economy following the first oil crisis. In 1965, the budget became unbalanced for the first time since the end of the Allied Occupation. It remained so for the rest of the century. The growth of central government expenditure and falling tax revenues were the main causes of the deterioration in the national finances in the last quarter of the 20th century.Less
Japan's main budget exhibited three symptoms of fiscal stress from 1975 through to 2000. First, a recurring deficit, persisting throughout the business cycle, that is, including years of both economic growth and decline. Second, an increasing level of outstanding debt. Third, rising costs of servicing that debt, pre-empting an increasing share of the total budget, and squeezing the amount of mandatory and discretionary programme expenditures. Those symptoms of acute fiscal stress first appeared in 1974–5, when the Ministry of Finance was forced to borrow to cover the costs of fast rising current expenditure in the ‘welfare era’ inaugurated in fiscal year 1973, and the slowdown in the economy following the first oil crisis. In 1965, the budget became unbalanced for the first time since the end of the Allied Occupation. It remained so for the rest of the century. The growth of central government expenditure and falling tax revenues were the main causes of the deterioration in the national finances in the last quarter of the 20th century.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0001
- Subject:
- Political Science, Political Economy
This book investigates the fiscal crisis being experienced by Japan, focusing on the Ministry of Finance (MOF) and its central budgetary system in the last quarter of the 20th century. It examines ...
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This book investigates the fiscal crisis being experienced by Japan, focusing on the Ministry of Finance (MOF) and its central budgetary system in the last quarter of the 20th century. It examines the MOF's functions and roles, as well as its relationships with the Spending Ministries and Agencies and the Liberal Democratic Party, in the performance of the core activity of government—deciding how much to spend and on what. It shows how budgets were made, and by whom, situated within the historical contexts of the evolution and development of the economy, the polity, and the administration. It deals mainly with the two central government budgets: the General Account Budget, and the Fiscal Investment and Loan Programme (FILP), the so-called ‘second budget’. Its main concern is with the processes that determined the amount and distribution of public spending, and with the consequential budget deficits and debts to which they gave rise. The book focuses on the pre-Diet stages of budget planning, formulation, and allocation.Less
This book investigates the fiscal crisis being experienced by Japan, focusing on the Ministry of Finance (MOF) and its central budgetary system in the last quarter of the 20th century. It examines the MOF's functions and roles, as well as its relationships with the Spending Ministries and Agencies and the Liberal Democratic Party, in the performance of the core activity of government—deciding how much to spend and on what. It shows how budgets were made, and by whom, situated within the historical contexts of the evolution and development of the economy, the polity, and the administration. It deals mainly with the two central government budgets: the General Account Budget, and the Fiscal Investment and Loan Programme (FILP), the so-called ‘second budget’. Its main concern is with the processes that determined the amount and distribution of public spending, and with the consequential budget deficits and debts to which they gave rise. The book focuses on the pre-Diet stages of budget planning, formulation, and allocation.
- Published in print:
- 2011
- Published Online:
- June 2013
- ISBN:
- 9780804773300
- eISBN:
- 9780804777667
- Item type:
- chapter
- Publisher:
- Stanford University Press
- DOI:
- 10.11126/stanford/9780804773300.003.0006
- Subject:
- Political Science, Political Economy
This chapter covers the critical period from 1970s through the 1980s that led to the accumulation of problems in the Fiscal Investment Loan Program (FILP) system. As political pressure on the Liberal ...
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This chapter covers the critical period from 1970s through the 1980s that led to the accumulation of problems in the Fiscal Investment Loan Program (FILP) system. As political pressure on the Liberal Democratic Party (LDP) increased and the economy suffered several economic shocks, Japan's budget situation deteriorated significantly. The government, in particular the Ministry of Finance (MOF), increasingly relied on FILP to fill in budget gaps and to deflect pressure on the budget. MOF pushed budgetary requests onto FILP, often without sufficient consideration of the financial risk of such decisions. By the 1980s, this strategy succeeded in restoring a degree of budget discipline and helped bridge the gap between fiscal hawks and the pork-barrel wing in the ruling coalition, but it did so at expense of the FILP system. As a consequence of subordinating FILP to fiscal and political ends, bad loans and project failures accumulated over the long term.Less
This chapter covers the critical period from 1970s through the 1980s that led to the accumulation of problems in the Fiscal Investment Loan Program (FILP) system. As political pressure on the Liberal Democratic Party (LDP) increased and the economy suffered several economic shocks, Japan's budget situation deteriorated significantly. The government, in particular the Ministry of Finance (MOF), increasingly relied on FILP to fill in budget gaps and to deflect pressure on the budget. MOF pushed budgetary requests onto FILP, often without sufficient consideration of the financial risk of such decisions. By the 1980s, this strategy succeeded in restoring a degree of budget discipline and helped bridge the gap between fiscal hawks and the pork-barrel wing in the ruling coalition, but it did so at expense of the FILP system. As a consequence of subordinating FILP to fiscal and political ends, bad loans and project failures accumulated over the long term.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0015
- Subject:
- Political Science, Political Economy
In Japan, the processes of budget-making were divided temporally by the submission of the formal budget requests by the Spending Ministries and Agencies on 31 August. Prior to that, the Ministry of ...
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In Japan, the processes of budget-making were divided temporally by the submission of the formal budget requests by the Spending Ministries and Agencies on 31 August. Prior to that, the Ministry of Finance had to decide, and Cabinet approve: first, the upper limit on the size of the overall General Account Budget, and the amount and type of government borrowing to finance capital investment programmes, and to cover any deficit on current expenditure; second, the budget guidelines to be used in the preparation of budget requests; and, third, within those guidelines, the upper limit or ceiling for the budget of each ministry and agency. The budget processes of the Fiscal Investment Loan Programme proceeded in parallel and interacted with those of the General Account Budget at several important stages. This chapter examines Japan's budget strategy and guidelines as well as ministerial budget ceilings and the influence of the Liberal Democratic Party in budget-making.Less
In Japan, the processes of budget-making were divided temporally by the submission of the formal budget requests by the Spending Ministries and Agencies on 31 August. Prior to that, the Ministry of Finance had to decide, and Cabinet approve: first, the upper limit on the size of the overall General Account Budget, and the amount and type of government borrowing to finance capital investment programmes, and to cover any deficit on current expenditure; second, the budget guidelines to be used in the preparation of budget requests; and, third, within those guidelines, the upper limit or ceiling for the budget of each ministry and agency. The budget processes of the Fiscal Investment Loan Programme proceeded in parallel and interacted with those of the General Account Budget at several important stages. This chapter examines Japan's budget strategy and guidelines as well as ministerial budget ceilings and the influence of the Liberal Democratic Party in budget-making.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0020
- Subject:
- Political Science, Political Economy
The management and manipulation of budget outputs in Japan helped the Liberal Democratic Party (LDP) to maintain itself in power for thirty-eight years until 1993 and, less certainly, after its ...
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The management and manipulation of budget outputs in Japan helped the Liberal Democratic Party (LDP) to maintain itself in power for thirty-eight years until 1993 and, less certainly, after its return to the leadership and domination of the coalition governments from 1996. Through governmental and party organizations, the LDP had begun to play a more active and interventionist role in policy-making generally from the early 1970s. Opportunities for the LDP to influence those processes and their outputs occurred at four main stages: first, at the time of the formulation of the overall budget strategy, and the prescription of the ceilings for the General Account and Fiscal Investment Loan Programme Budgets; second, at the stage of compiling budget requests within each Spending Ministry and Agency; third, after the submission of formal budget requests, at the successive stages of hearing, examination, negotiation, and ‘revival’ conducted by the Ministry of Finance's Budget Bureau; and fourth, at the point of delivery of benefits, services, investments, grants, subsidies, and so on.Less
The management and manipulation of budget outputs in Japan helped the Liberal Democratic Party (LDP) to maintain itself in power for thirty-eight years until 1993 and, less certainly, after its return to the leadership and domination of the coalition governments from 1996. Through governmental and party organizations, the LDP had begun to play a more active and interventionist role in policy-making generally from the early 1970s. Opportunities for the LDP to influence those processes and their outputs occurred at four main stages: first, at the time of the formulation of the overall budget strategy, and the prescription of the ceilings for the General Account and Fiscal Investment Loan Programme Budgets; second, at the stage of compiling budget requests within each Spending Ministry and Agency; third, after the submission of formal budget requests, at the successive stages of hearing, examination, negotiation, and ‘revival’ conducted by the Ministry of Finance's Budget Bureau; and fourth, at the point of delivery of benefits, services, investments, grants, subsidies, and so on.
Maurice Wright
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199250530
- eISBN:
- 9780191697937
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199250530.003.0027
- Subject:
- Political Science, Political Economy
This chapter examines public sector spending in Japan in the broader context of those of other G7 countries, and assesses the effectiveness of the Ministry of Finance's policies to reconstruct the ...
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This chapter examines public sector spending in Japan in the broader context of those of other G7 countries, and assesses the effectiveness of the Ministry of Finance's policies to reconstruct the finances of central government compared with the performance of other central and federal governments. It is worth nothing that, despite all the economic and fiscal vicissitudes of the 1990s, Japan's economy remained the second largest in the world, and cumulative growth in real terms compared very favourably with that of the other G7 countries from 1989 to 1996; only Germany out-performed it. However, the slowdown in the Japanese economy after 1991 allowed first the United States and then all but Italy to catch up, and by 1998 to overtake it. General government expenditure, deficits, and debts in G7 countries are discussed, along with Japan's fiscal performance relative to that of G7 countries and the failure of fiscal reconstruction in G7 countries in the 1980s.Less
This chapter examines public sector spending in Japan in the broader context of those of other G7 countries, and assesses the effectiveness of the Ministry of Finance's policies to reconstruct the finances of central government compared with the performance of other central and federal governments. It is worth nothing that, despite all the economic and fiscal vicissitudes of the 1990s, Japan's economy remained the second largest in the world, and cumulative growth in real terms compared very favourably with that of the other G7 countries from 1989 to 1996; only Germany out-performed it. However, the slowdown in the Japanese economy after 1991 allowed first the United States and then all but Italy to catch up, and by 1998 to overtake it. General government expenditure, deficits, and debts in G7 countries are discussed, along with Japan's fiscal performance relative to that of G7 countries and the failure of fiscal reconstruction in G7 countries in the 1980s.