A changing Ministry of International Trade and Industry

The 1990s will be remembered by future generations of Japanese people as the decade during which the institutional foundations that sustained the growth and development of Japan's post-World War II political economy underwent significant transformation. The dragging economic recession following the collapse of the bubble and incessant waves of globalisation brought about structural changes in the so-called convoy system, keiretsu groupings and life-time employment practices, which had long been the distinctive characteristics of Japan's financial system, industrial organisation and labour relations. It is also noteworthy that, by coincidence (or perhaps luck), a series of scandals involving élite bureaucrats surfaced and the scope of reforms reached the core of Japan's administrative structure. Even the most stubborn sceptics would have difficulty denying the effect of sweeping reforms which include the revision of the Bank of Japan Law, the breakup of the Ministry of Finance, and the strengthening of the functions of Cabinet. Important change also took place in the political arena when the introduction of a new electoral system triggered significant partisan realignment and new patterns of government formation.