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

Research output: Working paper

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 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.

Details

Authors
  • Alena Rakhmanko
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Other Social Sciences

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.
Original languageEnglish
PublisherCentre for East and South-East Asian Studies, Lund University
Number of pages88
ISBN (Print)978-91-980900-4-8
StatePublished - 2015
Publication categoryResearch
Externally publishedYes

Publication series

NameWorking papers in contemporary Asian studies
No.44
ISSN (Print)1652-4128

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