Amakudari

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DEFINITION

A Japanese business practice in which senior politicians retire to executive or high-profile positions within the corporate realm. Meaning "descent from heaven," amakudari as a practice shifts retired bureaucrats to industries related to the public sector work that they retired from, creating a strong bond between private and public sectors.

INVESTOPEDIA EXPLAINS

Amakudari as a practice has been increasingly associated with corruption and a tie to old, outdated ways of doing business. The practice is considered corrupt because it creases a strong incentive for retired bureaucrats to resist reforms, since their high level jobs are directly related to their connections with the government. It is considered outdated because Japanese businesses often operate in a very hierarchical manner, with particular emphasis placed on seniority. This has been said to make advancement through merit difficult.


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