Rebuilding Japan, Without the Graft

At the end of World War II, the Japanese had a saying that, thanks to American bombers, a person could roll a bowling ball from Tokyo all the way to Yokohama. The half-century that followed was an almost uninterrupted construction binge. Japanese firms built factories and office buildings, apartment blocks and highways, dams and bridges, bullet trains and airports—the links in the nation's vast, intricate, just-in-time supply chains. The outside world thinks of Japan's rise from smoldering wreck to the world's second-largest economy as being built on cars and electronics. But a good portion of it was built on building.

The beneficiaries of all that spending were the so-called zenekon, large construction companies such as Kajima, Shimizu, Obayashi, and Taisei. The strength of the zenekon ensures that Japan is ready to rebuild quickly in the wake of its latest—and still unfolding—catastrophe, just as it did after the 1995 Kobe earthquake. But the sector, while a point of pride catered to by the nation's elected leaders and bureaucrats, isn't always a force for good. Proof lies all over Japan—in mammoth tunnels and bridges to nowhere, dams built against the advice of engineers, and seawalls raised over the objections of those they were purported to protect.