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No.4 ,Politics  Jan 29, 2011

THE SWEEPING CHANGES IN JAPANESE POLITICS SINCE THE 1990S

In countries with well-established democratic political systems, major political reforms are unusual, and drastic reforms of a comprehensive or multifaceted nature are rare indeed.[1. James G. March and Johan P. Olsen, Rediscovering Institutions (New York: Free Press, 1989), pp. 166-172.] But during the 1990s, under governments led for the most part by the long-ruling Liberal Democratic Party, Japan experienced a series of substantial changes in its political system, changes that together add up to what we may call a comprehensive overhaul. The most important change that has taken place in Japanese politics recently is the change of government that took place in 2009, when the Democratic Party of Japan took over from the LDP. In this article, however, I will attempt to make the case that the decisive changes in laws and rules, norms, and practices in postwar Japanese politics happened in the 1990s and even the change to a DPJ administration is an extension of the continuing turbulence since then. One example of the changes was the strengthening of the prime minister’s authority resulting from the reform of the central government ministries and agencies. Another was decentralization, which changed the relationship between the center and the regions. Then there was deregulation, changing the relationships between the regulatory organs and those regulated. New laws on disclosure and on nonprofit organizations changed the relationships between citizens and the government. In addition, a new system of policy evaluation and a major consolidation of existing municipalities were implemented. And the biggest reform of all–one that provided the impetus for other reforms and changes–was the electoral system reform that introduced single-member districts for the House of Representatives. Though it is not my purpose here to present a complete inventory of the changes in laws, rules, and norms, it is fair to say that a series of significant changes occurred in succession during the period of LDP rule from the mid-1990s.

The Formation of Non-LDP Administrations

The original impetus for these changes came from the split that occurred in the LDP in 1993, when many of its legislators quit to join other parties, including newly created ones. This was followed by a general election in which the LDP was defeated and a coalition government was formed by eight other parties, with Hosokawa Morihiro of the Japan New Party as prime minister. The first reform that the Hosokawa administration undertook was to overhaul the electoral system for the House of Representatives, replacing the multiple-seat districts with a combination of single-seat constituencies and proportional-representation blocks. This made it easier for power to change hands as the result of a relatively small movement in popular support levels for the rival political parties. The first general election under the new system was in 1996. The years that followed brought repeated splits and mergers among the parties opposing the LDP. Eventually, the Democratic Party of Japan emerged as an opposition force capable of going head to head with the LDP. In terms of popular support levels, the DPJ was already running close to the LDP as early as 2001, but its emergence as a party with a serious chance of winning power dates to the 2007 election for the House of Councillors, the upper house of the National Diet. And in August 2009 it finally won a majority in the House of Representatives, based on which it formed a new administration headed by its president, Hatoyama Yukio.

The earlier non-LDP administration headed by Hosokawa brought about significant change, but it lasted less than nine months, and the following one, headed by Hata Tsutomu, held power for barely two. Less than a year after they fell from power, the Liberal Democrats regained control by forming a coalition with their erstwhile foes, the Socialists, and the small New Party Sakigake. So the events of 1993 and 1994 are now seen as not having represented a full-fledged change of government.

The formation of a DPJ-led administration in 2009, by contrast, is seen as a full-fledged change. The DPJ’s approach may have been heavy-handed, but the administration of Prime Minister Hatoyama Yukio clearly showed that it was doing things differently, making cuts in public works and appropriating large sums to implement its policies for children and young people. The most prominent change, though, was in foreign policy. Many voters had believed that the DPJ’s foreign policy stance was not much different from that of the LDP, but the new administration’s handling of the plan for relocation of the US Marine Corps Futenma Air Station in Okinawa Prefecture made it evident that this perception was inaccurate. Prime Minister Hatoyama declared at a press conference that there was a possibility of moving the facility outside of Japan (rather than relocating it within Okinawa in accordance with the existing Japan-US agreement)–without having made any concrete preparations for this purpose. This earned distrust from the United States and created confusion on the domestic political scene. The relationship between the national government and the people of Okinawa deteriorated seriously, and even now there is no prospect in sight for implementation of the DPJ’s 2009 campaign pledge to move the facility to a location outside of Okinawa. And after Kan Naoto replaced Hatoyama at the helm in June 2010, the DPJ administration revealed its inexperience with its handling of the problems that arose in relations with China and Russia. The Kan administration failed to show a clear stance in dealing with the incident involving a violation of Japan’s territorial waters around the Senkaku Islands, and while relations between Tokyo and Beijing were unsettled, Russia’s President Dmitri Medvedev took the provocative step of visiting Kunashiri, part of the Japan’s Northern Territories. The shift to a government led by the DPJ has resulted in major changes in policies and decision-making procedures, but as I noted at the beginning of this article, my interpretation of Japan’s reform process is that it arose not from the 2009 change of government but from events that occurred more than 10 years earlier. After all, the DPJ ultimately decided to stick to the LDP-reached agreement on Okinawa, and it is not clear that the LDP would have handled the territorial disputes differently, either. The major change resulting from the DPJ’s taking power has been not in policies, but rather in the social and political networks supporting the government, its relationship with the bureaucracy in particular.

The Liberal Democrats’ Close Ties to the Bureaucrats

When the LDP regained power as part of a coalition in 1994, it was initially under an administration headed by Socialist leader Murayama Tomiichi. But in January 1996 the LDP’s Hashimoto Ryūtarō replaced Murayama as prime minister, and the Liberal Democrats reemerged as the visible top party. The key feature of the Hashimoto administration was its tackling of administrative reform. Through the broad reorganization of the central government apparatus, Hashimoto and his team moved to strengthen the authority of the prime minister and to establish a set of independent administrative institutions (a Japanese version of the British government’s agencies). Hashimoto reorganized the bureaucracy, reformed the financial system, and also moved to implement decentralization of power and the consolidation of municipalities. Ironically, this final reform, which led to a reduction in the number of municipal assembly members, invited the departure from the scene of significant numbers of the LDP’s traditional key supporters at the local level, thereby contributing to the party’s eventual fall from power in 2009.

During the LDP’s long reign, its members worked in close cooperation with the bureaucracy. Civil servants prepared policy drafts for consideration by the LDP, whose powerful Policy Affairs Research Council studied them and either approved or rejected them. The bureaucracy presented agenda items to the cabinet for its approval after completing consultations with the LDP. And once the cabinet approved a piece of legislation or a draft budget, it was a relatively simple matter to secure its enactment by the LDP-controlled Diet. This was typically how the decision-making process operated, with politicians and bureaucrats working hand in hand.

The relationship between the politicians of the LDP and the bureaucrats can also be explained as something like the relationship between principals and their agents. The politicians (principals) delegated specialized matters to the bureaucrats (agents). This sort of arrangement is commonly seen all around the world, but the LDP went unusually far in delegating responsibilities. Though this point is little stressed in studies of the LDP, in the early years after the party’s formation, the Liberal Democrats were more interested in finding time for themselves than in pursuing particular policies. From 1955 (when the LDP was established) to 1960 they had to devote a tremendous amount of time to building up the party’s local support organizations, including the Diet member’s personal kōenkai, or support associations. The LDP was a conservative party, but because of the post-World War II land reforms, which eliminated the former landlord class, and the purge of public officials and others conducted by the Allied Occupation forces, which removed many powerful local figures from the political scene, it could not call on the traditional conservative support base but had to start from scratch in building its network of local support groups. The party established branch organizations at the prefectural level, and individual LDP legislators busily put together their own election machines.

During the 1960s, once the Liberal Democrats had firmed up their local support bases, they found themselves with time and resources to spare, and they started to involve themselves in the bureaucracy’s policymaking process, operating largely through the Policy Affairs Research Council. In the early 1970s, the LDP’s Diet Affairs Committee heads took to issuing instructions directly to top-level bureaucrats without going through the ministers in charge. On top of that, particularly from the 1980s on, members of the LDP came to wield considerable clout over particular policy areas by operating through groups of legislators with specialized expertise. It became impossible to secure passage of legislation or approval for appropriations without first winning the approval of the relevant groups, which were called zoku, or tribes. Within the party, meanwhile, advancement was largely determined by seniority. On average a legislator could expect to be appointed to a cabinet post after being elected five times. Promising, relatively young legislators who were seen as possible future prime ministers were rotated through key cabinet positions, such as finance minister, foreign minister, minister of international trade and industry, and chief cabinet secretary. Let us look at a specific example of how this cooperative relationship between the LDP and the bureaucracy operated in practice.

A Case Study: Protecting Local Shopkeepers

In the 1970s and 1980s it was difficult for new participants to gain entry to the Japanese distribution system. A panoply of regulations responded to the retail industry’s desire for restraints on competition. But the Ministry of International Trade and Industry found itself under pressure, initially from domestic sources, to allow supermarket chains to set up outlets in the nonmetropolitan regions of the country. At first MITI sought to avoid the politicization of the matter (the involvement of politicians) by handling it with administrative guidance. The ministry’s idea was to allow competition where possible but require “adjustment” in places where opposition from local retailers was strong.

When this issue showed up on the political agenda from the 1960s on into the 1970s, the LDP enjoyed a solid hold on power, and retailers’ votes were not enough to sway the party. The bureaucracy was able to undertake the adjustment of the interests involved at its own discretion merely by keeping this from becoming a political issue.

But the 1970s brought the start of regulation of the supermarkets under the Large-Scale Retail Stores Act. This law prevented supermarkets from opening new local outlets unless they first conducted careful adjustment between their interests and those of local retailers. MITI set up Commercial Activities Adjustment Boards to handle this process. But in many regions it was seen necessary to carry out de facto adjustment in advance of the public deliberations of the CAAB, and “pre-CAAB” panels were set up for this purpose. On top of that, discussions came to be held in advance of the meetings of these latter panels–what one might call “pre-pre-CAAB” deliberations. In the 1980s the Large-Scale Retail Stores Act became an issue in trade talks between Japan and the United States, and the LDP became openly involved in this matter. LDP involvement in particular cases resulted in immediate approval for the opening of new supermarkets. The bureaucracy, as we can see in this case, changed its stance in line with the wishes of the ruling party. The LDP seems to have shifted its position on this issue gradually, balancing the pressure from the United States against the votes of shopkeepers. In this case both the ruling party and the bureaucracy played their respective parts: The LDP determined its attitude and policy with a view to domestic political stability and diplomatic concerns, and the bureaucracy first tightened and then loosened its administrative guidance with reference to the direction of the political winds.[2. See Tatebayashi Masahiko, “Kouri ryūtsū no seisaku katei” (The Policymaking Process for Retail Distribution), Hōgaku Ronsō, vol. 130, nos. 3-5 (1992).]

The “scrum,” so to speak, formed by the politicians of the LDP and the civil servants in the bureaucracy was at its peak in the mid-1980s. But if we look closely we find that criticisms of the existing set of rules and norms emerged from time to time even during the 1970s. The close cooperation within the scrum inevitably tended to result in pork-barrel politics. The legislators of the LDP used their clout to direct appropriations to their own districts for the construction of dams, roads, and the like, and the bureaucrats ended up working both openly and behind the scenes to meet the politicians’ wishes. In 1976, responding to critical public opinion in the wake of the Lockheed scandal, which led to the prosecution of former Prime Minister Tanaka Kakuei, a number of LDP legislators bolted from the party to form the New Liberal Club. And in the general elections held after this and other major scandals came to light, the LDP always lost seats. But overall the electorate was relatively tolerant of this sort of malfeasance; voters seemed to consider it more important to maintain the existing political order in the context of the Cold War confrontation with the Soviet Union and its Eastern camp. It seems to me that the public started to take a harsher view after the emergence of the Recruit scandal in 1989. Even Fujinami Takao, who was seen as an honest figure drawn into the scandal, though initially acquitted, ultimately received a guilty verdict–which seems to have been handed down to make an example of him and serve as a deterrent to others.

The scrum-like cooperative relationship between the politicians and the bureaucrats declined and ultimately collapsed in the face of criticism from the media and the public. This process occurred in a number of phases. In what follows I will sketch these phases, the last one of which brought the change of government in 2009.

End of the Cold War, Birth of the Hosokawa Administration

The first of the three phases in the demise of the “scrum” came in the early 1990s, when the process of globalization that had been occurring during the 1980s led to demands for the reform of the existing rules and norms. The decisive events marking the advent of this stage were the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991. The first clear indication of the impact of these developments was the formation of the non-LDP coalition administration of Prime Minister Hosokawa in 1993. As I noted above, the reason the electorate had previously refrained from voting the LDP out of power was national security policy. This was also the glue that held the disparate views and personalities within the LDP together. But with the end of the Cold War, the latent internal differences burst to the surface. One key point of contention that emerged at this time was the issue of political reform. It came to the fore in 1992-93, when Miyazawa Kiichi was prime minister and LDP president. Miyazawa was unable to overcome the rift within the party and come up with a unified position, and so in 1993 some 80 LDP legislators left the party. Subsequent to this reversal for the LDP, there was what one might call a popular boom in discussions of reform extending to many areas, such as reorganization of the central government ministries and decentralization. As a major example, a law on information disclosure (Act on Access to Information Held by Administrative Organs) was discussed, deliberated in the Diet, and finally enacted in 1997 with the support of all the political parties in response to public dissatisfaction with the opacity of the political decision-making process. Another major political issue at this time was the handling of the massive piles of bad debts resulting from the bursting of the bubble economy of the late 1980s.

In the mid-1990s, a series of scandals involving bureaucrats made it into the news. One that is still fresh in many people’s memories is the affair that came to light after Kan Naoto (now prime minister, but at the time part of the coalition cabinet of Prime Minister Murayama as head of the Ministry of Health and Welfare) ordered the release of documents that revealed the ministry’s involvement in allowing the use of HIV-tainted blood supplies. There was also a scandal involving the administrative vice-minister of the MHW. Previously, though misdeeds by politicians came to light from time to time, people had believed that civil servants were beyond corruption. But the 1990s brought a decline in the level of trust in the bureaucracy as well. In 1998, as many as 100 mandarins in the Ministry of Finance were punished for accepting improper entertainment.

A National Mood for Reform

The administration of Prime Minister Hashimoto, who succeeded Murayama, undertook a broad set of reforms in areas including financial services, public finances, education, and the organization of the government’s administrative organs. Hashimoto personally chaired a panel established to deliberate administrative reform, and his enthusiasm on this topic seems to have redoubled after campaigning against the New Frontier Party in the 1996 general election. But the key feature of the Hashimoto reforms was the fact that they led to a national mood for reform–a sense that reform was urgently required–transcending the internal deliberations of the panel chaired by Hashimoto. This tendency emerged after the issues of decentralization and consolidation of municipalities, which were being discussed energetically outside of this panel, emerged as items of political contention. The merger of municipalities was an especially big issue.

As of 1998 Japan had some 3,300 cities, towns, and villages. In the late 1990s the LDP and the Ministry of Home Affairs worked together to promote the consolidation of municipalities into larger units with incentives including subsidies and two-year extensions of local assembly members’ terms limited to municipalities that merged with others. A decade later, following the completion of this major program, the number of municipalities has fallen to about 1,700. Over a 10-year period, individual citizens considered whether it was advantageous for their own municipality to merge with one or more of its neighbors. Many came to see consolidation as essential in order to increase the scale of available funds at a time of tightness in public finances. Underlying this view was the problem of inadequate revenues at the national government level. The issue of municipal mergers led to nationwide discussion of the problems in public finances. In that sense this reform gave rise to what we may call a national mood of reform-consciousness.

T. J. Pempel, an American researcher on Japanese politics, called the changes of this period a “regime shift” in a book he published in 1998.[3. T. J. Pempel, Regime Shift (Ithaca: Cornell University Press, 1998).] And Toya Tetsurō, an elite bureaucrat and political scientist, noted that a political vacuum of sorts occurred in the latter part of the 1990s, which was a time of dramatic change.[4. Toya Tetsurō, “Kin’yū bigguban no seiji keizaigaku” (Political Economy of the Financial Big Bang) (Tokyo: Tōyō Keizai Shimpōsha, 2003).] This was because the political power derived from the “scrum” had receded. Of course it is impossible for a true vacuum to exist in politics. The situation to which Toya referred was one in which the old forces were maintaining their power to a certain degree but did not have enough strength to accomplish major tasks–and no new forces had clearly emerged to take their place.

Toya analyzed why it was possible during this period to undertake the major program of deregulation that came to be called the “Big Bang” financial reforms. Why did the normally self-assertive financial institutions refrain from pressing their own cases at this juncture? Toya’s conclusion was that the growing clout of the media and the rise of the concept of public interest kept financial industry groups from asserting their positions. To use a term from political science, the shared belief concerning the decision-making system shifted at this time. A country’s systems are sustained by a set of shared beliefs, but the set that prevailed in Japan during this period seems to have been different from the normal one. According to surveys of the bureaucracy that I conducted, the activities of bureaucrats receded before the start of the Koizumi administration in 2001 (table 1), and the percentage of bureaucrats supporting the LDP declined, while the share supporting no party increased (table 2). To the extent that the bureaucrats withdrew from the scene, as shown in the table, a political vacuum may indeed have arisen. Koizumi Jun’ichirō was the one who took note of this opening. It is fair to say that he was looking for a new type of leadership to fill the political vacuum. The Koizumi administration attempted to put the prime minister and the cabinet at the center of the political order in fact as well as in name.

graph : Table1・2

The Third Phase

The third phase of the demise of the “scrum” began with the LDP’s selection of Koizumi to head the government. The prime examples of Koizumi’s leadership and policy initiatives were seen in the settlement of the bad-debt problem, the privatization of the highway-related public corporations, the privatization of the postal system, and the so-called trinity reform program of fiscal decentralization. These policies subsequently came under considerable criticism: It was said that the resolution of the bad debts was not thorough and that only halfway measures were taken toward privatization of the highway-related public corporations. Similar critical assessments have been directed at the postal privatization program. And the news media frequently offered the critique that the Koizumi administration showed no interest in any other policy agenda items. Koizumi’s administration has been blamed in addition for the gradual widening of income and other disparities that emerged against the backdrop of the globalization that became prominent in the 1990s. All of these criticisms, however, seem to be completely lacking in the perspective that the principal role of politics is to establish the legitimacy of the government and maintain the political order. Koizumi made a substantial contribution by maintaining the political order and searching for a new set of rules and norms in the face of an economic recession and the collapse of the earlier relationship of cooperation between politicians and bureaucrats. His initiatives energized his cabinet ministers, increased the cohesion within the cabinet, and suggested the possibility of a new type of leadership to replace the former “scrum.” For Koizumi, both privatization and economic policy were tools for the establishment of a new political order. Some assert that Koizumi was voicing a neoliberal agenda with his slogans “Leave to the private sector what it can do” and “Leave to the localities what they can do.” He certainly made use of the neoliberal current, but there is room for argument over whether this formed the basis for his administration’s policies.

The first half of this third phase ended in 2006. Looking at the politics of the three LDP cabinets that governed after Koizumi stepped down in 2006, we see that they abandoned the search for a new type of leadership, and politics once again stagnated under the old set of rules and norms. People pinned their hopes on the DPJ, the top opposition party, and in the lower house election of August 30, 2009, they gave it a great victory, which led to the formation of a DPJ-led government the following month. The latter half of the third phase started with the search by the DPJ for a new type of leadership and a new set of rules and norms. According to opinion polls, the public’s assessment of the DPJ’s performance so far is harsh. Even so, the DPJ administration is keeping up the political reform process. People are still attempting to determine the nature of the political rules produced by the change of government from the LDP to the DPJ. What is of even greater interest to political scientists is the question of what sort of administration will be born after the current one–including the possibility that the LDP will lead or be part of it.

In closing I would like to make one more comment, namely, that the size of the electoral districts has a major impact. As I noted above, the reform of the electoral system in 1993 introduced single-seat constituencies for the House of Representatives. The effect of this change was clearly visible in the 2005 and 2009 elections. In 2005, under Prime Minister Koizumi’s strong leadership, the LDP won big, and many of those elected on Koizumi’s coattails were people with little political experience. In 2009, the tide turned against the LDP, with voters seeking a change of government, and the DPJ scored a major victory, but once again the election produced a large crop of young and inexperienced Diet members.

What remains to be seen is whether, with large numbers of legislators in both the ruling party and the opposition who have little experience and are unskilled at policymaking, the current and future political leadership will be able to achieve an economic recovery, which is the most important issue for Japan at this time, and rein in the country’s almost ¥1 quadrillion national debt.

Translated from an original article in Japanese written for Japan Echo Web. [February 2011]

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