The environment is set up such that you have to be risk averse. If you can't fire someone for incompetence, you're going to go the extra mile to make sure the

The environment is set up such that you have to be risk averse. If you can't fire someone for incompetence, you're going to go the extra mile to make sure the person you hire is competent. Ultimately that means hiring through social connections. You have a friend who knows someone looking for work, and it reflects badly on him if your hire doesn't work out. And your new hire knows it, so if there's a problem he not only loses a job (ultimately), but he loses a connection to find another job. Same goes with the apartment. Japan is famous for the difficulty in getting people out of an apartment. The harder it is to get people out the more pre-qualification you need to do up front as a landlord. So you demand not only that the tenant can demonstrate a stable job history, but that he has a lifetime job at a company that's willing to get involved if you have a dispute. Because if things go sour and you don't have outside leverage, you might have to go to the local mobsters to convince your tenant to leave.