Public finance and investment out of the Japanese post office : a history of the postal savings system

• Main Author: Spooner, Matthew
• Language: English
• Published: 2009
• Online Access: http://hdl.handle.net/2429/15348

The historical development of the Postal Savings System (PSS) can be viewed as serving two functions in the Japanese economy. First, the PSS has served as a savings regime for Japanese households since postal savings were established in 1875. The other function concerns the investment of postal funds collected by the network of post offices across Japan. In view of the relationship between the savings and investment functions, the political and economic implications of postal banking are highlighted by its institutional arrangements with public finance and investment. In the post-World War II period, Tanaka Kakuei seized the opportunity to safeguard and strengthen the affairs of the PSS. The realignment of political factions and consolidation of financial policy undertaken by Tanaka between the 1950s and 1980s brought to the forefront the compounding political and economic benefits and impending costs arising from postal banking in Japan. This characterized the political landscape of Japan for the next thirty years. Tanaka utilized the might of his political faction within the Liberal Democratic Party and a postal affairs interest group to effectively promote and safeguard the PSS and the Fiscal Investment Loan Program (FILP) budget. The innovations of Tanaka Kakuei are presented as the primary reasons for continued opposition to reform the Postal Savings System. The analytical framework presented in this paper is consistent with the historical development of the Japanese political economy.