Abenomics has transformed Japan's economy. Now for its civil service ...
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Version 0 of 1. A common pastime for British thinktanks is to present evidence from another country and pose the question: "Why can't we be more like this?" It can be a powerful way to demonstrate the effectiveness of radical, new approaches to age-old policy conundrums. So when I was invited to Japan as part of a European Union delegation to learn more about Abenomics, this seemed the obvious thing to do. For those unfamiliar with Abenomics, it is the impressive brainchild of prime minister Shinzō Abe, designed to shift the country once and for all out of its two-decade deflationary slump. The programme consists of three "arrows": aggressive monetary policy, flexible fiscal policy and a new growth strategy. Arrows one and two flew from the bow last year and are widely judged to have hit their targets. The government has already spent 10tn yen (2% of GDP, £60bn) on public projects and plans to spend a further 5tn yen in 2014. At the same time, the Bank of Japan aims to double Japan's monetary base within two years. Although some may quibble about the detail, none would argue that progress so far has been striking. According to the British Embassy in Tokyo, inflationary expectations are rising; business and consumer sentiment are at their highest level in six years; the Nikkei (a stock market index for the Tokyo stock exchange) has risen by 80% in what is expected to be its best year since 1972; employment levels are noticeably higher, while the unemployment rate is stable at 4.1%. The real test, however, is the third arrow: the new growth strategy. This consists of an ambitious package of structural reforms: to liberalise the electricity and pharmaceutical industries, to radically restructure Japanese agriculture, to reform the social security system, and to get more women into the workplace and into senior positions. There are no fewer than 30 supporting bills going through the Japanese parliament this year. Yet here the consensus is more mixed. Japan has a tortured history implementing structural reform, with the blame often pinned on an over-bureaucratic civil service. In the words of a former kyaria (fast stream) civil servant, professor Ko Mishima, "Japan is a showcase of bureaucratic paralysis." As a former civil servant, responsible in my latter years for innovation at the Department for Communities and Local Government (DCLG), I was struck by the parallels with regular criticisms of the British civil service. Indeed it is a common refrain across most advanced economies, as nations and trading blocs wrestle with the challenges of an ageing population and flatlining public sector productivity. I wanted to explore this further, and visited various government buildings. What struck me was just how quiet they were. Even DCLG in the dog days of 2010 seemed to have more energy. The second thing that struck me were the corridors and the offices. Corridors and offices? Not open plan? It felt so … 20th century. Of course, this might be no more than the common bias and prejudice that comes from a superficial exposure to a foreign culture. Yet when I talked for example about the UK government's recent attempts to embed continuous improvement in Whitehall (remember, Japan is the home of kaizen) I was met with a combination of incomprehension and incredulity. More than one civil servant told me how they regularly worked well into the night – seeing this as a badge of pride rather than a potential signal of low productivity. To its credit, Japan has barely a third as many civil servants per capita as the UK. Yet even here, its approach to personnel management felt antediluvian. Once civil servants have passed their entrance examination, they choose which department they will work for and remain with it for the rest of their careers. Mishima talks of "departmentalism, collusion with special interests, manipulation of administrative knowledge and ... lack of accountability" as some of the more obvious consequences of this approach. Yet despite these differences, I came away from Tokyo with a profound sense of the similarity between our two public sectors. Both are staffed by bright, dedicated and hardworking people. Both are clearly imbued with a strong public service ethos. And both are struggling with the complexities of modern government. In any event, by pinning their worries on the civil service, I suspect the critics of Abe's third arrow are themselves missing the point. A bit like early-years Thatcherism, it is wrong to think about Abenomics purely in terms of economic and institutional reform. It is just as much about "faith", about "the substance of things hoped for, the evidence of things not seen", to quote Saint Paul. Abenomics is about showing faith in the Japanese people that the country can shake off its torpor and return once again to the forefront of the world economy. Richard Harries is deputy director of the independent thinktank Reform and a former senior civil servant at the Department for Communities and Local Government. • Want your say? Email us at public.leaders@theguardian.com. Join the Public Leaders Network for more comment, analysis and job opportunities, direct to your inbox. Follow us on twitter via @Guardianpublic. |