In May, around the time Japan was declaring a Covid-19 state of emergency, government officials scrambled to pump as much stimulus as possible into a flatlining economy.
Tokyo’s aging, creaking administrative bureaucracy had other ideas.
Fully half of the funds – totaling about $2.2 trillion – that was earmarked for coronavirus aid to small companies and households sat idle. Despite expedited approval, the money was trapped in an only-in-Japan matrix of documents, required administrative stamps and demands for separate sets of original, and properly stamped, documents that went back and forth between different fiefdoms within, and across, agencies unused to coordinating crisis responses.
Then, the morass of checks, balances and administrative speedbumps gravely damaged then Prime Minister Shinzo Abe’s pandemic response. Now, the cost of all this paper flying around – lost productivity, squandered talent and reduced gross domestic product – is growing as Japan suffers its deepest slowdown in six decades.