The Real World of Japanese Politics: 1985 to the Present

The 1985 Plaza Accords, discussed extensively in the following chapter of this book, where Japan signed an agreement with other major developed nations to raise the value of its artificially undervalued yen, is now looked on as having subsequent major political as well as economic ramifications for Japan. After that agreement, Japan was forced to become more fully integrated into the global economy. The government could no longer keep export prices low and import prices high. Thus, the MOF bureaucrats, in an effort to make up for a projected fall in export sales, created a domestic boom by drastically lowering interest rates. The Japanese government’s reaction to the Plaza Accords triggered the economic malaise of the 1990s. These events are discussed in the next chapter, but the important point here is that the government-induced economic boom and bust had significant political ramifications.

Also, other domestic and international issues that had begun before 1985 and continue today would, along with economic problems, cause Japanese democracy to enter a new phase. These political changes are causing several elements of the Yoshida Doctrine and the LDP-created 1955 system to either largely no longer apply to Japan’s government and politics or to be seriously weakened. Domestically, political leaders and the public in the 1980s began to realize that people were living longer than ever before, and if the trend continued (as it has), Japan would have a larger percentage of old people than any other nation. By the beginning of the 1990s, the public and political leaders recognized that the related trend of low birthrates, which has also continued, was not only a demographic but also a political issue. Such social programs as pensions and health care were designed during a time when the majority of people were young, had much higher costs by the 1980s, and needed reform. More and more women were better educated, but Japan lagged behind Western Europe and the United States in providing professional opportunities for educated women.

As mentioned, the heating up of the Cold War in the 1980s had already caused a change in Japan’s national security policies as Prime Minister Nakasone Yasuhiro, who served as chief executive between 2002 and 2007, expanded the SDF’s role in occupying a maritime frontline position against the USSR. Nakasone and other political leaders also realized that with the death of Mao a new China as well as a rising threat from the Democratic People’s Republic of Korea meant Japan had to take a more active role in its own national defense. Although Nakasone was unsuccessful in many of his efforts to strengthen Japan’s military forces, his lack of reticence in improving defense capability was a change from the low national security profile of typical Japanese prime ministers. Nakasone also spoke out on the need for economic deregulation. The prime minister’s willingness to articulately voice opinions and his charismatic personal style made him popular with large numbers of the public who were proud to have a prime minister who was a strong chief executive and an international figure. This success would serve to lay the groundwork for later strengthening of chief executive powers in Japan.

Other international events, in particular the end of the Cold War and accelerated globalization, put additional pressure for change on a political system and government that seemed not able to cope. During the decades-long struggle with the USSR, the United States had been content to overlook many of the Japanese government’s policies that prevented American imports, but the end of the Cold War brought changes. With the USSR no longer a threat, the United States exerted more pressure on Japan’s government to open its economy to foreign goods, services, and investments. Global dissemination of technology and liberalization of markets in many countries around the world created efficient multinational corporations that were in a better position to compete than a number of Japanese firms that were either subsidized by the government into comfort levels that hindered their productivity or unable to act in a flexible way because of excessive bureaucratic regulation. A growing number of urban consumers were also increasingly tired of high prices caused by LDP subsidies for farmers and other inefficient industries. All of these events unleashed an unprecedented level of public dissatisfaction with the old Yoshida/1955 system. In 1993 the LDP, for the first time in its 38-year history, lost a national election. A multiparty coalition of all sizable opposition parties except the communists led by Hosokawa Morihiro, scion of an aristocratic family and former LDP member and journalist, captured a majority in the House of Representatives. Although Hosokawa’s coalition government and his party lasted less than a year before being replaced when he had to resign in 1994 because of allegations of past misuse of funds, in retrospect the election was important. Japan ever since has been experiencing what appears to be, in the words of political and economic analyst Richard Katz, ‘‘a long, tumultuous transition toward a political system that is more suited to the needs of the present day economy and security situation, a government in which parties (or coalitions) alternate in power. This process has its own ebbs and flows’’ (Katz 2008, 1).

The LDP regained power but temporarily conceded the prime minister’s office by coalescing in 1994 with its major longtime political party opponent, the socialists (Social Democratic Party of Japan). Socialist leader Murayama Tomiichi served as prime minister for two years. Even though the LDP entered the 1994 coalition with the socialists in order to regain power, it was the socialists who repudiated their platform through joining the LDP, and they permanently appear to have lost credibility with much of the public. Since the late 1990s, the socialists have declined and the Democratic Party of Japan (DPJ), a centrist/liberal party, has become the LDP’s major opponent. Many political analysts consider the DPJ, created in 1998 and which quickly gained popularity, to constitute a major step toward a Japanese two-party system. The party bills itself as reform-minded and representative of a variety of professionals including attorneys, bankers, and journalists as well as workers.

The LDP managed to regain the prime minister’s office in 1996 but since then has primarily retained control of the House of Representatives through forming coalition governments with other parties, most notably the New Komeito Party, now the third-largest political party in Japan and associated with the Japanese Buddhist Soka Gakkai organization. New Komeito, a moderate party dedicated to clean government and abolishment of nuclear weapons, brings the LDP a reliable, disproportionately high working-class vote. However, the party is not controlled by the LDP, so withdrawal of coalition support is an ever-present possibility.

As of the publication of this book, the LDP retains a greatly reduced power over the Diet, relative to the past, and the prime minister’s office through a pragmatic combination of political reform and continuing voter disenchantment—support for the DPJ notwithstanding—with the other party alternatives. Also, the LDP, which supports a stronger military, has mostly benefited from public recognition that post–Cold War security issues pose new challenges for Japan and simple reliance on the United States or general pacifist sentiments do not constitute viable policies. The LDP also survived most of the first decade of the 21st century because of the public popularity of Koizumi Junichiro, who served as prime minister from 2001 to 2006.

Until 1994, the multiple-member, exclusive, proportional lower-house electoral system favored LDP candidates because the party was the only one with ample enough funds to run several candidates in a single district. Since in most districts a large number of candidates running against each other were from the LDP, policy issues usually didn’t matter, which diminished real choices for many voters. In 1994, before his own coalition government that had ousted the LDP fell, Prime Minister Hosokawa managed to get the Diet to approve the current House of Representatives election system whereby a majority of representatives are elected from single-seat constituencies rather than proportionately. This has created more of a policy focus on the part of many LDP candidates since they aren’t running against each other. Also, a number of LDP candidates are now getting elected on their positions on policy.

More independent LDP Diet members who were elected on their own, sometimes because of their policy stances, have weakened but not eliminated the power of LDP factions that in earlier times could control more Diet seats through money and favors. In 2000, the LDP changed its party leader selection process (party leaders are Diet members who become prime minister according to LDP rules if a government can be formed) and made it more transparent. Each of the LDP’s 47 prefectural chapters now have three votes for party leader while each LDP Diet member gets one vote in the selection. In the spring of 2001, after the new LDP party leader selection process was employed, Japan had its 11th prime minister in almost 12 years. The new LDP party selection process made a difference as the prefectural LDP chapter representatives bucked the old-guard party leadership and voted heavily for a reform candidate, Koizumi Junichiro, who subsequently became Japan’s first strong prime minister in almost 14 years.

Koizumi, who served as prime minister from 2001 to 2006, both was a strong executive and employed a new style of politics. He was photogenic, made an effective communicator, sported a popular hair style, let the public know about his interests including a deep affection for the American pop icon Elvis Presley, and gained a reputation as a maverick who was going to make needed changes in Japanese politics and government. Although from a longtime LDP family, Koizumi’s educational background was different than many of the Japanese political elite. Instead of attending such ‘‘old boy’’ former imperial institutions as Tokyo University, Koizumi graduated from Keio University, a highly regarded private school, where he studied economics. Koizumi studied abroad in London as well.

Perhaps most important, Koizumi entered office with an understanding of how globalization was changing Japan and with a vision of what he intended to do to reform the political system. Although Koizumi failed as much as he succeeded, his mixture of successful reform, adroit politics, and personal courage even when taking unpopular stances won the respect of elements of the media and the public. Koizumi, who gained nicknames like ‘‘Lion Heart’’ for his boldness in publicly challenging political enemies, managed to remain in office and make changes in government that appear to be long-lasting.

The prime minister and his inner circle recognized that economic globalization was irreversible. If Japan wished to recover from the more than decadelong economic malaise, old political and financial structures that gave the Japanese government too much control over economic management and overrelied on a political system that allocated enormous amounts of public monies to unproductive activities had to be greatly reduced. This meant fixing Japan’s serious financial and banking problems, deregulating of much of the economy, and ending a substantial portion of pork-barrel spending. In order to achieve policy success, Koizumi had to battle not only the bureaucracy but also entrenched elements within the LDP, his own party, who bitterly opposed economic liberalization and government spending reductions.

Koizumi initiated several major economic reforms, which are described in more detail in the next chapter, that were designed to strengthen Japan’s corporate sector domestically and internationally through deregulation, solve the financial crisis that had lasted more than a decade, privatize inefficient government corporations, and make the LDP more responsive to large numbers of Japan’s urban residents and less beholden to rural interests. He also attempted to make higher education more responsive to government and corporate needs through wide-ranging reforms including creating incentives for national universities to compete for government research funds.

Whenever possible, Koizumi seized power from the bureaucracy. For example, MOF bureaucrats had been ineffectual in solving the bank bad loans crisis, but Koizumi was able to do it through making maximum use of minimal executive appointments and through Diet action. Koizumi governments also managed to slow down the national government spending that had been occurring through local grants, subsidies to special interests, and public works spending for local governments. Koizumi both cut national spending and required significant local matching funds, usually half the total projected expenditures or more, before central government fund allocations would be distributed for public works projects.

The prime minister also tried to address the question of how to deal with the economic needs of the elderly, Japan’s fastest growing population. In an effort to keep an increasingly expensive national pension system under control, the LDPdominated Diet during the Koizumi years passed a law that restructured the system by increasing payment premiums from working adults but promised to collect enough tax revenues that the total of an individual basic pension would not fall below 50 percent of the average income of a working person.

Koizumi attempted to continue a process intended to transfer power from the central governments to prefectural and local ones that had begun shortly before he became prime minister. In January 2001, a major Diet-approved governmental reorganization went into effect. The reorganization package had several objectives.

Two important ones were to give prefectural and local governments more flexibility in meeting the needs of their citizens and to increase local officials’ power while decreasing the authority of central government bureaucrats. Objectives of the reorganization package included making the units of government closer to the people more responsive. The number of national ministries and agencies was cut from 22 to 12 in an attempt to promote more efficient policy making and implementation by eliminating ministry and agency turf wars. This was affected by merging several ministries and agencies and creating two gigantic cabinet ministries, the National Land and Transportation Ministry and the General Affairs Ministry. The idea was that the reduction in the number of separate bureaucratic agencies and ministries would make elected officials’ jobs easier in interacting with government bureaucracy.

Another objective of the reorganization was to strengthen elected officials’ power by increasing the executive authority of the prime minister. Koizumi met resistance from central government bureaucrats in his efforts to decrease the ministry’s power over the economy and in his attempts to implement government decentralization. He was much more successful with the former objective than the latter.

Perhaps Koizumi’s major victory over both bureaucrats and strong opposition from his own party was his successful privatization of Japan’s huge postal savings program. For decades the postal savings program, the largest source for individual savings deposits in Japan, provided interest rates to savers that were slightly higher than commercial banks. Ministry of Posts bureaucrats then funneled the monies to various government agencies for a host of projects. Koizumi, who had campaigned on the promise to privatize the postal banking system, dissolved the lower house in 2005 when the Diet refused to pass a bill achieving his objective and called for an election depicting it as a national referendum on his proposal. Koizumi as party leader also refused to support LDP Diet members who opposed the measure. A large number of voters viewed these moves as daring and felt that voting to retain an LDP government with Koizumi as head constituted a vote for needed reform. The fall 2005 election was the biggest LDP victory of the new century, and the privatization legislation passed during the 2006 Diet session.

In foreign policy, Koizumi saw increased national security as essential for the new circumstances Japan faced. He increased the size of the SDF and continually made public comments to the effect that Japan needed a ‘‘normal’’ military like other sovereign nations. Koizumi also, despite public division on the issue, assertively supported the U.S.-led war on terrorism. Shortly after the September 11, 2001, attack, Koizumi was one of the first world leaders to contact then President Bush and assure him that he agreed with him in fighting a global war on terrorism. Koizumi wrote the president, ‘‘You must win and Japan will help’’ (Green 2007, 28). Koizumi and the Diet then passed legislation deploying maritime SDF forces to refuel coalition forces operating against the Taliban in Afghanistan.

In January 2004, he became the first prime minister in postwar history to send Japanese troops who were not a part of United Nations (UN) peacekeeping forces to Iraq, a combat zone. In order to constitutionally do this, even though the troops were in a noncombatant role, Koizumi managed to enact controversial legislation in the Diet. The Japanese government also contributed $5 billion to the war against terrorism. Koizumi also introduced legislation in 2006, enacted after he left office, that elevated the former Japan Defense Agency to Japan Ministry of Defense. The law took effect in 2007 and makes the civilian head of SDF part of the cabinet.

Although Koizumi pushed the constitutionality of SDF utilization to new boundaries, there was established legal precedent for international deployment of the SDF. As of 2005, Japan’s SDF had been sent to 14 countries, mostly for humanitarian purposes or as part of UN peacekeeping forces, since its first international mission in Cambodia in 1992. In the most recent year for which statistics are available, Japan’s SDF forces now have the fifth-biggest budget of all militaries in the world, trailing only the United States, the United Kingdom, France, and China.

As mentioned, Koizumi did not succeed in a number of items on his ambitious agenda, and some policy changes that he enacted remain controversial with elements of the Japanese public and with other Japanese politicians, including LDP members whose self-interests were tied to maintaining the 1955 system. Bureaucrats were able to join forces with LDP Diet members and defeat his plans to privatize the Japan Highway Public Corporation and the National Mail Services.

Koizumi, although able to wrest much power away from the national ministries, was unable to secure control of the central government budget formulation process. Since the postal bank privatization law is incrementally enacted, even the eventual success of this much-touted measure is unsure at this time. Pension reforms proved to be insufficient since Japanese families continue to have low birthrates, and the question of how to fund retirement income is a serious political issue again. In his foreign policy, Koizumi was viewed by the Japanese Left, and at times other East Asian nations, as being too much of a hawk. His several visits to Yasukuni, the Shinto shrine that honors imperial Japan’s war dead, provoked riots in China in which Japanese property was destroyed and formal protests from the Republic of Korea.

Still, by having a clear political vision, skillfully articulating it to the Japanese people, taking decisive action that at times produced clear results, and engaging in, for Japan, what were considered daring political tactics, Koizumi’s political and policy legacy resonate in the archipelago’s politics and government. One of the reasons the Democratic Party of Japan (DPJ) has become apparently a viable second party in Japan is through appearing more realistic to voters in its policy proposals than such earlier parties as the socialists and communists. However, by engaging in imaginative political campaigns, DPJ politicians lifted at least some tactics and strategy from the Koizumi playbook.

The DPJ first became popular because the party leaders offered practical policy alternatives to the LDP. The DPJ issued very specific positions including a proposal that elected politicians gain more control over government by expanding the central government’s authority to appoint more high-level bureaucrats. In 2003 the DPJ made inroads against the LDP in Diet elections through its policy proposals and by tying many LDP politicians to the bureaucracy despite the fact that Koizumi was an opponent of the bureaucrats. These 2003 gains were particularly impressive considering that the party was experiencing growing pains and organizational problems because of a recent merger with a smaller left-of-center party shortly before the election.

The DPJ also had political leaders who were effective in personal-style campaigning that captured the attention and imagination of voters. In 2006 the DPJ won a special election to fill a vacant lower house seat in Chiba Prefecture that Koizumi wanted for the LDP. Party leader Ozawa Ichiro secured the support of enough groups in the Chiba district through imaginative campaigning that included bicycling around for high-profile meetings with voters. Then, in July 2007, after Koizumi had left the prime minister’s office a year earlier having reached the constitutional term limit for service in the office, the DPJ dealt his successor, then LDP Prime Minister Abe Shintaro, a humiliating defeat by winning a majority in the upper house elections. This was the first time that the LDP had ever lost control of the House of Councilors in the history of the party. Ozawa skillfully took advantage of a period of time marked by higher taxes and increasing gaps between the rich and the poor. He organized campaigns in hundreds of smaller locales and particularly appealed to those Japanese who were not benefiting from recent reforms enacted by the Japanese government in response to economic globalization. Furthermore, Ozawa effectively captured media attention by promising beforehand to resign if the DPJ lost the upper house election and challenged Abe to do the same.

Abe refused to resign after the humiliating defeat but went on to leave the prime minister’s office in September 2007, citing ill health. He was replaced by Fukuda Yasuo, a caretaker prime minister who subsequently resigned in September 2008 and was replaced by longtime LDP politician Aso Taro, the grandson of Yoshida Shigeru. As this book is published, the LDP clings to a majority in the lower house in coalition with the New Komeito Party, with the DPJ in solid control of the upper house.

Events, particularly in the Diet and in the prime minister’s office, are indicative of the nonlinear course of change from the death of the old 1955 system to a new phase of Japanese politics. The Japanese Diet has been in virtual gridlock on a host of issues since the unprecedented DPJ upper house victory. Important prime ministerial appointments, including the presidency of the Bank of Japan, have been blocked by two-thirds upper house majorities. Similar bottlenecks have occurred with legislation including, in a period marked by rising gasoline prices, a controversial gas tax bill. This situation was not lost on Japanese who were also experiencing a 2008 economic downturn. Throughout the latter part of 2007 and much of 2008, opposing parties in the Diet spent time blocking legislation and wrangling over rules, and there was virtually no sign of compromise. As a result, national polls indicated that public support, already low for the LDP as evidenced by the 2007 elections, had now plummeted, and politicians of both parties were proving to be, at least temporarily, more unpopular than bureaucrats.

According to both political scientists and such seasoned politicians as former Prime Minister Nakasone Yasuhiro, these recent events point to a structural problem in Japan’s government that will need to be addressed given the transitions that are occurring. When Japan is compared to other democracies with bicameral legislatures, the Japanese House of Councilors is considerably stronger than other nations’ upper houses. Constitutionally, only the Japanese lower house can nominate the prime minister, ratify treaties, and approve the budget. In all other matters, the two houses are equal except that the lower house can override an upper house veto by a two-thirds majority, difficult at best with the current party divisions.

Upper houses in the United Kingdom and Germany have nothing like this kind of power. Although the Italian upper house is roughly as powerful as its Japanese equivalent, it can be dissolved, as is the case with Italy’s lower house. In Japan, only the lower house can be dissolved. In the United States, the Senate’s and the House of Representatives’ powers are roughly equivalent but, unlike the Japanese prime minister who must control events in the Diet to have virtually any power, the American president has an independent source of power because of direct election by the voters. The president can take much more policy action, even when the chief executive’s party is in a minority.

This structural imbalance can be traced to Japan’s 1947 Constitution, which was developed by Americans who were then supported by like-minded Japanese. Occupation authorities held the concept of checks and balances and two powerful legislative chambers in high esteem but were unfamiliar with how parliaments best operated. Japanese involved in developing the 1947 Constitution were operating from the traditions of the 1889 Constitution, which envisioned less of a role for the legislative body than would be the case in a viable democracy. Thus, the issue of a deeply divided Diet was probably not concretely conceptualized.

If Japan is to continue to develop a form of democratic legislative politics in which parties contest for voters on policy issues and more than one party is strong, the situation just described must be rectified. There are two possibilities. One is revision of the 1947 Constitution to alter the current legislative status quo. In 2008, DPJ secretary-general Hatoyama Yukio anticipated the current problem and wrote a recommended constitutional revision that was publicly disseminated. His proposal called for abolishing the upper house and creating a unicameral legislature. Former Prime Minister Nakasone Yasuhiro has also developed his own suggested constitutional revision that he thinks will solve the problem. Nakasone proposes that in the event of an upper/lower house division, the lower house can override the upper house with a simple majority.

The problem with constitutional revision, which has been discussed on several issues including, most notably, Article 9 is that there is a sense of general apprehension on the part of many Japanese about the unintended ramifications of beginning a process of constitutional revision. Postwar Japan has risen from the ashes of defeat and authoritarian rule and transformed itself into a prosperous and free democracy. This has occurred with the current Constitution, which has never been amended, as the overarching framework of government.

Many Japanese consider the Constitution in almost reverential terms. Those who remember World War II as well as large numbers of people born afterward, who have been taught that Japan is the first ‘‘pacifist’’ country, see the Constitution as a major reason why Japan has not been directly involved as a combatant in war since 1945. Although other Japanese feel quite differently, in a society where harmony is still highly valued relative to many cultures, proposed constitutional reform of any kind is a sensitive issue.

Another more immediately practical way to solve the problem of party deadlock is for Diet members to create bipartisan or multipartisan parliamentary precedents. Foreign examples could be useful. The British have a rule called the Salisbury Doctrine that was designed to avoid legislative deadlock. The House of Lords may modify but cannot oppose legislation passed by a House of Commons majority if the legislation had been included as part of the ruling government’s campaign manifesto and received, because its sponsors won an election and could form a government, the electorate’s implicit approval. Although the U.S. government does not have a parliamentary system, it is common procedure in the U.S. Congress that joint committees are established with members from both houses to resolve disagreements about a particular bill. There have been calls for the creation of a special bicameral Diet committee to study foreign procedures used in bicameral legislatures to solve the kind of problems that have recently occurred in Japan.

In the spring of 2008, a few Diet members publicly proposed changes in some historic Diet procedural rules that appear to be contributing to gridlock in light of the unique situation in postwar Japan of two parties with virtually equal legislative power. For example, there is a Diet rule dating back to the 19th century that bills must be passed in the same session in which they are introduced and cannot be carried over from one session to the next. This means that in a divided legislature where one party has enough power to seriously challenge another, incentives exist for members of any powerful opposition party to focus on scheduling maneuvers and on attacking administration scandals rather than debating issues. Opponents of a government-sponsored bill can simply waste enough time, and the legislation will automatically die at the end of the Diet session.

Japan has been a successful country for virtually all of its existence in comparison to many of the world’s nations because it benefited from pragmatic, intelligent, and farsighted leaders who solved such problems as the one just described. If the Diet log jam continues to hinder the passage of needed legislation, leaders who put the nation’s welfare above partisan politics will emerge because of strong electoral support.