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The ruling Liberal Democratic Party (LDP)’s crushing defeat in Japan’s Lower House election last October has led to political unpredictability. The bureaucracy in Japan provides important infrastructure for both policymaking and policy implementation, especially in periods of relative instability. However, this bureaucratic system is also losing its appeal and is now facing a crisis.
Prime Minister Ishiba Shigeru committed to civil service system reform in his campaign pledge for the recent LDP leadership election, but significant change seems unlikely in the current unstable political environment. Nevertheless, this deepening crisis presents a valuable opportunity for external experts to actively participate in Japan’s closed bureaucratic system and increase human mobility more than ever before.
Japan’s bureaucracy has been key to its stable and consistent policymaking, despite government reforms since the 1990s that reduced bureaucratic autonomy. Under the parliamentary cabinet system, 80 percent of bills passed by the National Diet (Japan’s national legislature) are submitted by the cabinet—drafted by bureaucrats— and have a passage rate of over 90 percent. Japanese bureaucrats excelled at coordinating interest groups and forging policy compromises behind the scenes.
Unlike the United States, the Japanese bureaucracy operates in one of the most closed systems in the world. Most civil servants are not politically appointed, except for a small number of high-ranking officials. Instead, Japanese university graduates are recruited via competitive exams and cultivate loyalty and professionalism over long careers within ministries. The civil servant system, characterized by lifetime employment, seniority-based wages, and job rotation every few years, has optimally supported this structure. Career bureaucrats remain in one organization for 26.7 years on average—double the U.S. average of 13.5 years, and reach a managerial position in a ministry in about 25.5 years on average. Japan’s system is designed to produce generalist public officers who, while not necessarily subject matter experts, possess government-specific skills such as policymaking and political coordination. Only 1 percent of ministry civil servants hold doctorates (compared to 4 percent in the United States), and half of ministries do not distinguish between bachelor’s and doctorate holders when considering career advancement.
The system is dramatically losing its ability to attract talent. Over the past 25 years, the number of new college graduates applying for elite career-track civil servants has plummeted by more than 50 percent, as shown in Figure 1 below. Furthermore, the percentage of top university graduates among successful civil service candidates has dropped from 32.5 percent to 9.7 percent, implying that the quality of applicants has declined. Further, resignations among younger elite career-track civil servants with less than a decade of experience have doubled over the past decade, and approximately 80 percent of the ministries consistently face a shortfall in their allocated staff capacity. Talented young individuals no longer see bureaucracy as a viable or attractive career path.
One of the primary reasons is the lack of professional growth. The civil service system aims to create well-rounded generalists but hinders the development of specialized skills and expertise, reducing the competitiveness of civil servants in the broader labor market. According to the Cabinet Bureau of Personnel Affairs survey published in 2022, almost half of respondents in their 30s cited a desire to pursue jobs in which they can obtain professional skills as the main reason for resigning, as shown in Figure 2 below. The challenges of achieving a healthy work-life balance also cannot be overlooked. Around 30 percent of civil service employees cite insufficient income and long working hours as reasons for considering resignation. In 2022, central government civil servants averaged 397 overtime hours annually, compared to a national average of 120 hours.
Experts argue that the primary cause for the increase in resignations is reduced autonomy. Over the past 30 years, Japan has centralized political leadership to increase control of the policymaking process once managed by bureaucrats. While civil service reforms often balance political responsiveness with merit-based expertise, Japan’s focus has been primarily on political oversight. In the pursuit of making the civil service more responsive to political agendas, reforms that enhance bureaucratic expertise have been largely neglected.
As a result, the Japanese bureaucracy lacks the capacity to adequately recruit, develop, and promote specific experts, struggling to adapt to the emerging fields that demand specialized expertise, such as artificial intelligence, data science, security, and finance. In Japan, it is difficult to find PhD-level personnel to lead science and technology policies or chief economists to analyze policy effectiveness. The percentage of respondents who have confidence in government adopting innovative ideas was the lowest in Japan, at 20 percent, compared to the OECD average of 38 percent.
However, the hollowing out of talent within the bureaucracy is leading to a movement toward hiring external talent in its system. Concrete examples of this trend can be seen in the Digital Agency, established in 2021, and the Financial Services Agency (FSA), both of which boast a mid-career hiring rate of over 30 percent. A common challenge both agencies faced was a significant lack of talent capable of addressing increased complexity resulting from rapid technological change on a global scale. These agencies hired experts such as IT professionals, cybersecurity experts, attorneys, accountants, and experts with financial experience. In 2018, FSA implemented a “meritocracy-based appointment” policy, reinstating former bureaucrats in relatively senior positions, such as vice commissioner, despite traditional biases against reinstating civil servants who previously resigned. The Ministry of Economy, Trade and Industry (METI) has joined this trend, targeting 30 percent mid-career hires by 2030.
In October 2024, METI announced plans to enhance Japan’s economic intelligence capabilities by developing expertise in economic security within government, think tanks, educational institutions, and industry. The ministry plans to promote information sharing, welcoming experts, and leveraging government research funds to strengthen this knowledge base. These efforts will encourage outside experts to enter within the closed bureaucratic system.
In May 2024, the Civil Service HR Management Advisory Board of NPA published an interim report recommending civil service reforms such as implementing a job-based compensation system and promoting employees based on performance rather than seniority. However, the proposal lacks a clear vision for how the central government will address the shortage of experts and answer the demand of young- and middle-career talented individuals for their expertise development.
The key to acquiring experts is to transform the civil servant system from a closed one to an open one through further human talent mobility. Japan’s revolving door system is essentially one-way: while people leave, very few enter. Rather than restricting experts to fixed-term, field-level roles, it is essential to place external specialists with skills and experience in the private sector in mainstream positions within the bureaucracy, enabling internal knowledge accumulation. Defining priority areas of expertise and organizing the recruitment process, salary structures, and career paths based on meritocracy are crucial steps. Some ministries and agencies are already moving in this direction despite facing challenges, and the growing talent shortage is likely to accelerate this trend.
On the other hand, there remains the role of generalist bureaucrats, supported by their specific expertise in policy formulation and coordination within the administration, interaction with politicians, and knowledge of managing administration. This expertise is endogenous, costly, and relationship specific and requires considerable time to cultivate, which has traditionally been achieved through a public service system based on collective recruitment and lifetime employment. While merit-based hiring is also expected for generalists, and the NPA’s interim report has explored this direction, Japan’s political instability makes top-down implementation unlikely, suggesting it will take significant time for such changes to take root.
Therefore, a hybrid model is practical and realistic in the near future. Figure 3 below shows the present and potential future of the Japanese bureaucratic system. In this model, “expert” civil servants would be recruited more widely from outside the government and promoted based on meritocracy and advance along a career path as experts, bringing in skills from the private sector. Meanwhile, “generalist” civil servants would gradually transition to a semi-open and more merit-based system for recruitment and promotion.
This approach would better align the civil service with evolving societal and institutional demands. By integrating merit-based recruitment of external experts, the government would promote labor market flexibility between the public and private sectors, enabling the seamless incorporation of cutting-edge expertise and innovative ideas more readily. A meritocratic hiring and promotion framework would expand opportunities for aspiring civil servants, whether fresh graduates or mid-career professionals, while ensuring fair evaluation and advancement paths for experts. It also fosters respect for specialized knowledge, granting experts greater discretion in their roles. Supporting this transition is a pragmatic step, and sustained increases in the flow of expertise into government roles would gradually transform the bureaucracy into a more open system.
As the Japanese bureaucracy loses appeal, the country’s policy infrastructure could erode, weakening its capacity to develop and implement effective policies. The rigidity and lack of specialized expertise in the bureaucracy have contributed to persistent stagnation. However, this crisis also presents an opportunity to make the policymaking process more inclusive and specialized. Although past efforts at civil service reform have encountered setbacks, further delay is no longer viable. Now is the time to revitalize Japan’s stagnating civil service, transforming it into a competent institution for the challenges of the modern era. Civil service reform must be the nation’s inevitable top priority.
Yohei Kobayashi is a visiting fellow with the Japan Chair at the Center for Strategic and International Studies (CSIS) in Washington, D.C., and a chief analyst from Mitsubishi UFJ Research & Consulting. Makoto Tsujiguchi is a visiting fellow with the CSIS Japan Chair from the Japan Business Federation (Keidanren).