JPRI Critique, Vol. X, No. 1 (January 2003)
The Brookings Institution and the Study of Japan
by Mindy Kotler
On November 20, 2002, Dr. Edward J. Lincoln—a well-known Japan specialist at the Brookings Institution in Washington D.C. and a former adviser to Walter Mondale when the latter served as ambassador to Japan—was given his walking papers. Brookings Director of Foreign Policy Studies, James B. Steinberg, said there was too little money and too little interest in the foundation world for research on the political economy of Japan and Asia to justify retaining Dr. Lincoln. Steinberg’s new policy, for Brookings, emphasizes projects as opposed to program-based fund-raising. Funders approached by Steinberg expressed so little interest in the Japanese economy, he stated, that he could not defend sending to the Brookings Board of Trustees any of Lincoln’s research project proposals. Thus, Lincoln will leave his position at the end of June 2003, the close of Brookings’ fiscal year.
The implications of this decision go far beyond the career of one of the best-known scholars on Japan’s economy. (In 2001, Brookings published Lincoln’s latest book on the subject, Arthritic Japan: The Slow Pace of Economic Reform.) It raises a number of important questions about Washington think tanks and how funding dictates policy research priorities. Does project-based fund-raising in contrast to program support affect or skew scholarly research?  Is the role of a think tank to examine the future and explore issues on the distant horizon, or should policy research exist merely to promote time-sensitive, political agendas? In addition, why is there a lack of interest on the part of American foundations to support research on Japan? Is it possible that Japanese funding of Brookings, which had its origins in the mid-1970s as a thank-you for favorable coverage, has become somewhat less-than-enamored with Lincoln’s recent writing? If so, the Lincoln episode highlights how funders can influence America’s foreign policy research agenda.
Funding Determines Priorities
For years, observers of policy research fund-raising have warned that foreign funding, especially from parts of Asia, comes with implicit strings attached. Those who defend these gifts are quick to point out that they do not take them with conditions and that they do not accept interference by the funder. For the most part, this is true. The “but” comes in, however, when the “project” is first selected. No project moves forward unless it is acceptable to a funder in the first place. Any “conditionality” is embedded in the project plan. In the case of relatively small fundings, foreign donors can accomplish two important goals: they can tie up scholarly resources to work on red-herring and redundant projects, and they can cultivate a select group of people (mostly white men) by offering private programs and publication opportunities. The latter is fundamental to creating a comfortable human network (jinmyaku in Japanese) of contacts among foreign policy elites. In some cases, it also creates foreign policy elites.
Mr. Steinberg’s current funding priorities—Korea, China, the region’s energy requirements, and Russia’s energy relationships in the region—unfortunately sound like the mundane ones traditionally encouraged by Japan and Taiwan sources. These topics have long been the focus of considerable American and European scholarly talent, and indeed much of the Asia-Pacific research already done appears to be a distraction from the imaginative analysis and scrutiny that these countries really need. For the past 10 years, Japan has funded so many energy and regional security studies that one is left wondering what they do not want studied. None of the myriad studies anticipated Japan’s military restlessness, North Korean detente with Japan, democracy in Taiwan, and the growth of militant Islam in Asia.
The Institute of International Economics (IIE) is often cited as a research center heavily funded by Japan. This is not true. Only 10 to 15 percent of its funding comes from Japanese sources. What is true is that Japanese funding is very specific and targeted, and comes from what appear to be “designated funders” such as Nomura and the Sasakawa family of funds. [Some scholars believe that Nomura is a pipeline for the Finance Ministry and Sasakawa for the Foreign Ministry.] In terms of targeted projects, the most important Japanese-funded project at IIE is an approximately $200,000 semi-annual private meeting of leading monetary-policy officials. Through projects such as these, IIE has gained recognition for its policy analysis of Japan’s economy. It should be noted, however, that neither of IIE’s two scholars who cover Japan has Japanese language skills and one only began his study of Japan five years ago.
Brookings and Japanese Funding
It is also important to look at Dr. Lincoln’s tenure at Brookings within the context of Japanese funding of American think tanks. Brookings was the first Washington research center to be offered funding from Japan. It was also the first to turn it down, at least temporarily.
Reeling from the Nixon shocks of 1971, Japanese government and industry were searching for ways to hurt the Nixon Administration, influence American opinion leaders, and arrange better access to policy changes affecting Japan. The handful of lawyers like Noel Hemmingdinger and Mike McDaniels, PR consultants like Mike Masaoka, and friendly congressmen like Ways & Means Chairman Wilbur Mills had failed to quell the bitter textile dispute or to warn Japan about changes in economic or foreign policies that would affect Tokyo.
In the early 1970s, Brookings began a series of studies of the major political economies, such as Great Britain and China. In 1971, with funding from the Andrew Mellon Foundation, Brookings launched its path-breaking study of Japan’s political economy under the leadership of Harvard’s Henry Rosovsky and Yale’s Hugh Patrick. The result was Asia’s New Giant: How Japan’s Economy Works, published by Brookings in 1976.  Also in late 1971, Philip Trezise, a Japan expert (although he could neither speak nor read Japanese) and the former assistant secretary of State for economic affairs who participated in the resolution of the textile dispute with Japan, joined Brookings to begin a cooperative economic dialogue with Japan. Mr. Trezise had not liked Nixon’s tactics vis-à-vis Japan.
In 1972, Keidanren approached Brookings to fund projects on Japan, especially the new ongoing study on Japan led by Rosovsky and Patrick. Kermit Gordon, then head of the Brookings, was reportedly appalled by the offer, even if it was for one million dollars. Gordon had rejected gifts from the U.K. for the study of the British economy and this seemed to him to be more of the same. He strongly believed that such funds would call into question any scholar’s impartiality and inhibit objectivity.
As can well be imagined, Brookings’ Foreign Policy Studies team was startled by Gordon’s decision to reject the offer. With the traditional foundations, such as Ford and Rockefeller, then beginning to be more interested in funding domestic social programs and questioning the racial and gender composition of think tanks, Brookings was having a difficult time supporting its Foreign Policy Studies program. Headed by former State Department official (Chairman of the Policy Planning Council) Henry Owen (1969-78), Foreign Policy Studies was receiving a cool reception from many domestic funders.
In the end, Owen, Trezise, and then-fellow Fred Bergsten (eventual founder of IIE) found a way to funnel Japanese money to Bookings. The first effort was simply to have foreign participants in studies pay their own way. In December 1971, an annual conference with Germany, Japan, and the U.S. was initiated for which each side funded its own participants—no foreign monies actually flowed through Brookings. Most important, in 1973, Sumitomo Heavy Metal, whose chairman was then head of Keidanren, donated $1 million to the Japan Society in New York City to establish the “Sumitomo Fund for Policy Research.”  This “American” fund lasted for approximately five years and over 50 percent (some say 80 percent) of the funds went to the Brookings Institution.  Not long thereafter, in 1976, Kermit Gordon died and the practice of accepting foreign and special interest funding for projects and programs initiated by Henry Owen became firmly established.
What Do the Japanese Want?
No Japanese official to whom I have spoken in the public or private sectors has expressed great surprise at Lincoln’s imminent departure from Brookings. He has been there since the mid-1980s (except for the years 1994-96, when he was on leave while serving in the American Embassy in Tokyo), and he followed Trezise as the Brookings’ resident specialist on Japan’s political economy. One Japanese journalist thought that the Japanese Embassy and Foreign Ministry would be rejoicing. Indeed, Lincoln has long been the subject of whispering campaigns to discredit his work. The Japanese in Washington note that a lot of people in Japan do not like Lincoln because he is usually correct in his analyses, tells the truth, is fluent in Japanese, and writes and speaks in a forthright manner. The problem for Japan seems to be that although Lincoln’s scholarship and analyses are accurate and articulate, he is just too negative. His position at Brookings was too powerful and his views held Japan up to too much scrutiny. It was as if he was telling too many family secrets.
Lincoln articulately and factually highlighted the darker aspects of the U.S.-Japan relationship—a fragile security relationship being held together by an even more fragile economic one that in today’s global economy threatens to destabilize all political gains. The ugly truth is that Japan’s antiquated economic system is unlikely to keep pace with 21st century economies. Many policy officials on both sides of the Pacific who need to manage the relationship do not perceive this view as helpful. Yet, some thoughtful Japanese officials speculate that while in the short run it may be good for Japan to be rid of Lincoln, in the long run it is a bad sign for U.S.-Japan relations. It is just another indication of Japan’s declining importance in Washington—better known as “Japan passing.”
It is also likely that Mr. Steinberg, a veteran of the Clinton Administration, has already lined up a prominent Bush Administration official with the right academic credentials to fill the Brookings “Japan slot.” This man will be well-liked by the Japanese and can be counted on to attract substantial funding for Asian regional security projects. He (it is unlikely to be “she”) will tell the current administration what it and the Japanese want to hear.
When I interviewed Mr. Steinberg about the Lincoln matter he averred that Northeast Asia continues to be a “big priority” for Brookings and that the region’s long-term dynamics are of great interest because the “security architecture has not kept pace with other changes in the region.” It is unfortunate that Mr. Steinberg does not seem to believe his own analysis, since it takes an understanding of more than military affairs and personal connections to understand these dynamics. The changes in Asia are about economics and how modernity has strained the family, traditional Asian human relationships, governmental arrangements, the environment, and the physical well-being of citizens. In other words, it is all about political economy, Ed Lincoln’s specialty.
MINDY L. KOTLER is founder (1991) and director of the Japan Information Access Project, a Washington, D.C.-based research center on Japan and Northeast Asia. JIAP  publishes the Asia Policy Weekly and the Asia Policy Calendar.
EDWARD J. LINCOLN is the author of Japan’s Unequal Trade (Brookings, 1990), Troubled Times: U.S.-Japan Trade Relations in the 1990s (Brookings, 1999), and Arthritic Japan: The Slow Pace of Economic Reform (Brookings, 2001). JPRI publications by Lincoln include Working Paper 5 (January 1995), “TheU.S.-Japan Trade Agreement of September, 1994: Contending Views of Believer and Skeptic, by High Government Official Versus Pensioner of Cardiff” [the High Government Official was Edward J. Lincoln and the Pensioner of Cardiff was Chalmers Johnson]; Working Paper 56 (April 1999), “Whither Trade Policy with Japan;” and Working Paper 81 (October 2001), which was the first chapter of his latest book.  

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