A bureaucratic organization in a network setting: MITI and Japanese industrial policy for high technology

The idea of the supremacy of bureaucracy has dominated the study of Japanese political economy. Such an argument, put forward by Chalmers Johnson, asserts that Japanese political economy is based on a plan rational system, where goal-oriented strategic policies are effectively used to achieve national economic development through the rational policy choices of elite bureaucrats. A typical example is the industrial policy formulated by the Ministry of International Trade and Industry (MITI).;Although such an approach is still predominant in the study of Japanese political economy, its validity needs to be examined. Since Japanese industry has greatly developed compared to the past, the emphasis of Japanese industry has moved from heavy industries to high technology industry, and the organizational resources of MITI are strictly limited, the impression of all-mighty MITI in the Japanese political economy needs to be reconsidered.;In this study, the characteristics of the Japanese industrial policy have been investigated by way of analyzing the policy making process. The focus is laid on industrial policy for the information industry.;Two perspectives are explored. One is the bureaucratic organizational perspective, and the other is the network relations perspective. Using these perspectives, Japanese industrial policy can be understood as an outcome of the dynamic policy making process mediated by the conditions within MITI, industry, and environment surrounding MITI and industry.;In order to analyze the industrial policy making process, two research methods are utilized. One is a case study of the policy making process involving the Very Large Scale Integrated Circuit (VLSI) Project. The other is an analysis of MITI policy makers evaluations of the industrial policy making process by interview methods.;The findings support the theoretical assumptions and hypotheses of this study. MITI's industrial policy does not rely on direct, high-handed, planned, and regulatory measures, but on indirect, cooperative, contingent, and flexible methods. An implication of this study is that organizational design such as the network relationship between MITI and industry is most important to the flexible adaptation of policy to turbulent and uncertain environmental conditions.