The ideal relationship between government and business in the 21st century lies somewhere in between the extreme models that Japan and the United States present, according to Glen Fukushima, the former Deputy Assistant U.S. Trade Representative for Japan and China.
“There has to be a happy medium somewhere in between,” said Fukushima, in a discussion moderated by Professor of International Law Joel Trachtman at The Fletcher School earlier this month.
Fukushima, who also served as president of the American Chamber of Commerce in Japan and worked for several companies in both Japan and the United States, highlighted the contrasting conceptions of the public and private sector in the two countries.
He noted that while the U.S. has a tradition where the private sector often leads while the government follows, in Japan the opposite is often true. The U.S. also tends to have much looser regulations on executive commissions and the movement of former government officials into the private sector through the so-called ‘revolving door.’
“In some ways, these are the two most different systems,” Fukushima noted.
Each has its own strengths and weaknesses, he explained. Japan has been unable to draw its brightest minds from the private sector into government, which means that at times government officials may not possess some specialized knowledge about technical issues. But while Washington is quite successful at attracting talent from the business world, that practice also raises questions about potential collusion and the protection of the public interest.
Fukushima also observed that both countries have been touted as the “ideal model,” only for their limits to become apparent thereafter. Though Japan has been experiencing over two decades of anemic economic growth, it was once praised by some observers when it surpassed the U.S. by some economic measures in the late 1970s. Indeed, during Fukushima’s time at Harvard University, Professor Ezra Vogel, for whom he was a teaching fellow, penned the famous book “Japan As No. 1,” extolling the virtues of Tokyo’s industrial competitiveness.
“When I was at Harvard Business School, about half the business cases were about Japan,” Fukushima added.
More recently, he said the U.S. model has also taken a hit with the 2008 financial crisis, exacerbating concerns about corporate greed and the lack of regulation. “That changed perceptions about the U.S. model,” Fukushima noted.
Other countries lie somewhere in between the extremes of U.S. and Japan, Fukushima said, with Britain being closer to the United States and France and Germany more so to Japan. He urged developing countries in search of a model to try to find a healthy medium between these two extremes, depending on their level of development. He further urged them to draw inspiration from those nations who have already successfully done so.
“Countries like Singapore are good at figuring out the right mix,” he observed.
Fukushima argued that finding the right balance in the relationship between government and business has profound implications for a country because both bring different assets to the table. He said the tradition of service and focus on the larger strategic picture in the public sector were important attributes that needed to be married with the focus on concrete results and technical expertise in the private sector.
“It is important not only to be competent but also to serve the broader public interest,” he said.
Despite painting this complex picture, Fukushima admitted that if he were asked to choose to examine the country that was “No. 1” today, given its advantages in various fields including higher education, “for all its faults,” he said, “I would choose to examine the United States.”
-- Prashanth Parameswaran, PhD candidate
Photo: Pat Subpa-asa, MALD candidate 2015