Is the Democratic Party of Japan Just a Reincarnation of the LDP?

High Hopes for Real Change

The Japanese public’s expectations soared when Prime Minister Hatoyama Yukio and the Democratic Party of Japan took control of the cabinet and both houses of parliament in September 2009. Under the preceding 20 years of almost uninterrupted Liberal Democratic Party control, Japan’s economy shriveled from 18% of world GDP to 8%, wiping out virtually all of the advances the country had made since the 1960s. In the process, Japan also surrendered its primacy at the head of East Asia’s overall economic success to a China growing at 10% a year, which was Japan’s own growth rate during the 1960–70 period. Nor had the LDP dealt effectively with the country’s exploding demographic problems, its rising public sector debt, or its escalating levels of unemployment and inequality. Japan’s “lost decade” had stretched into 20 years of social malaise, administrative dysfunction, and political abdication.

Following its formation in 1998, the DPJ had been steadily gaining electoral support; it had won the 2007 House of Councillors election; and finally it toppled the LDP by winning a substantial majority of the seats in the 2009 House of Representatives election. The party’s success was, in large measure, due to its promises to cut what it criticized as the LDP’s lavish public works projects and to reallocate the money to “Putting People’s Lives First.” Voters had legitimate expectations that the new DPJ government would radically upend the stagnant status quo and usher in an era of economic dynamism.

A Rocky Start for DPJ Rule

Yet almost immediately upon taking office Prime Minister Hatoyama found himself under a firestorm of criticism from both the US and the Japanese defense establishments for his proposal to move US Marines off Okinawa; media attacks for a $4 million campaign funding scandal linked to secret and generous payments from his heiress mother; the inability of his budget cutting task force to come up with more than one quarter of the promised $32 billion in projected savings; and difficulties in implementing a promised cut in road and gasoline taxes.

Kan Naoto, who replaced Hatoyama in June, 2010 fared little better. By announcing his support for a doubling of the consumption tax just before the Upper House election of July 2010, he virtually assured the DPJ’s loss of its majority, which the vote count quickly confirmed. That in turn left the DPJ needing to negotiate with the opposition bloc headed by the LDP to pass any part of its legislative agenda.

Finally, in the wake of the “triple disaster” of 3/11—the earthquake, tsunami, and nuclear plant accident—the DPJ demonstrated minimal effective crisis management. In the aftermath of the crisis, pundits and citizens alike had called for a cohesive plan to revitalize Tōhoku and in the process, perhaps, for a newfound national purpose that could unify Japan. That has not happened. Instead the disaster showed both Kasumigaseki and Nagatachō(*1) at their worst. Agencies focused primarily on agency interests, ignoring the need for cooperation in service of national goals, while the major parties squabbled for partisan advantage, refusing to put aside their bickering however temporarily to deal with Japan’s largest single crisis since 1945.

Analyzing why the DPJ has failed to provide policy initiative and coherent direction could suggest any number of ad hoc explanations. Thus, when the DPJ replaced the LDP it was inexperienced and few of its new cabinet officials had significant executive experience. The DPJ also took office castigating the Japanese bureaucracy and seeking to establish its authority over such officials in ways that often led senior DPJ officials into irresponsible micromanagement. Any number of short-term policy fumbles over the last three years, whether on Futenma, the Senkakus, or Fukushima, might have been avoided by more experienced politicians and by more self-confident collaboration with Japan’s talented civil servants. The DPJ’s lack of a majority in the Upper House has also impeded movement since 2010. Finally, the 3/11 disaster was of such biblical proportions that any government would have been overwhelmed by both its complexity and the conflicting demands for action. None of these handicaps to effective implementation of the DPJ’s new agenda should be denied. At the same time, I wish to suggest that the problems faced by the DPJ run far deeper structurally than any of these suggestions would imply.

Fundamentally the DPJ is a party that was cobbled together from multiple discordant parties and groupings, all of which continue to press for highly divergent policy predispositions by the party. The DPJ thus lacks an internally cohesive vision of what it, as a party, most wishes to achieve. Nowhere is this division more clear cut than in the privileged but pivotal position of Ozawa Ichirō, who has so frequently undercut the party’s leaders and the policies they are pursuing. But Ozawa is not alone; sniping within the party has been consistent and to date no DPJ leader has been able to command sufficient authority (or raw power) to intimidate his potential opponents sufficiently to ensure compliance with his directives.

The LDP Era of “Pork and Productivity”

This internal lack of party unity was precisely what brought the LDP down. In an article entitled “Between Pork and Productivity: The Collapse of the Liberal Democratic Party” (Journal of Japanese Studies, vol. 36, no. 2 [summer 2010], pp. 227–54), I argued that the LDP’s parliamentarians, from the time of the party’s formation, represented two distinct strands. A first group, the productivity segment, gave priority to maximizing national economic growth through bureaucratically-led industrial policy, the technological improvement of large firms, and an aggressive pursuit of export markets for Japanese products. Equally important, however, was the party’s pork politicians, whose focus was on securing tangible budgetary benefits for their local constituencies through such things as public works, the postal system, and protection of small and medium sized industries and agriculture. The shotgun marriage of these two constituencies—pork and productivity—rested on continued conservative control over governmental office, sustained economic growth, and the consequently ever-expanding budgetary resources available to the LDP and the Japanese government.

For the first 35 years of LDP rule (1955–90) this model worked brilliantly. Japan’s thriving economy helped the LDP retain power; the LDP’s hold over power was mobilized in support of national economic growth. The very success of Japan’s economic project, however, fundamentally altered Japanese society. Phenomenal economic growth created a Japan that was richer, healthier, longer living, less rural, and more consumerist than the voting constituencies that first brought the LDP to power. And Japan’s most successful corporations ceased to manufacture predominantly in Japan but had moved across East Asia and around the world.

Yet, the LDP was lethargic in appealing to these new constituencies through policies designed to accommodate new needs, particularly when doing so meant alienating their longtime voting blocs and the pork oriented politicians who came increasingly to make up the leadership of the party. As a result, a number of interest groups and government agencies had secured devastating veto power over policies that they opposed. This problem became especially visible following the bursting of Japan’s economic bubble, in the aftermath of which the LDP became essentially a party exclusively of pork. It delivered expensive benefits to favored constituencies through continual government borrowing that created ever rising budget deficits and escalating public sector debt.

Though many in the LDP did not applaud him for such, Prime Minister Koizumi Jun’ichirō was an effective challenger of this stranglehold of pork-oriented politics by his vigorous challenge to protected sectors of the economy, the construction and highway lobbies, the non-performing loans, and the postal system. Koizumi’s media savvy, combined with the party’s collective realization that its hold on office depended on retaining him as its leader, left Koizumi free to bypass traditional internal party channels and intra-party consensus building in favor of direct populist appeals. Following the tactical brilliance he demonstrated in engineering the LDP’s electoral landslide in the 2005 election, Koizumi was in a perfect position to lead the refurbished LDP in advancing a policy agenda of reform and bringing about a return to national productivity that would be more responsive to a predominantly urban and consumerist country. Yet Koizumi failed to consolidate his monumental win and within a year the party was back under the control of economically tone-deaf prime ministers who exerted all their efforts to reversing most of Koizumi’s reforms and to returning to a politics of pork and the protection of special interests.

Wavering Between Reform and the Status Quo

When the DPJ first began contesting elections it did far better with urban voters than in Japan’s rural areas. In the 2003 and 2004 elections, for example, the LDP was much stronger than the DPJ in rural areas while the DPJ bested the LDP in urban constituencies. By the 2005 Lower House election and the 2007 Upper House election, however, the DPJ and the LDP were roughly similar in their mix of their urban and rural voting percentages. Ultimately the DPJ gained its majorities not by adding to its urban appeal but by taking the electoral battle to the LDP’s rural stronghold. It was largely due to Ozawa and his successful electoral maneuvering that so many “Ozawa children” came into the party and gave it the majority it needed to transcend its earlier urban base. But electoral victory came at the price of policy coherence on economics and the policy transformations required for Japan to return to productivity.

One simple example concerns the quick reversal of the Hatoyama government’s 2010 budget. Only four of the 200 projected budget freezes on highway projects were actually carried out. It was widely reported that the reversal of Minister of Land, Infrastructure, Transport, and Tourism Maehara Seiji’s initial decision to freeze these projects was the intervention of DPJ Secretary General Ozawa, responding to local pleas for continued funding.

Surely it would reduce the endemic power of Japan’s rural areas if action were taken to implement the Supreme Court’s decision that the Upper House electoral system unfairly favors the rural areas. Yet such a probability seems far off and it continues to fall to party politics to decide whom its economic policies should favor.

To his credit Prime Minister Noda Yoshihiko has sought to be a policy activist, including his embrace of a consumption tax increase and the call for Japan to join in negotiations for the Trans-Pacific Partnership. When Noda first considered joining TPP negotiations he also committed himself to coming up with measures that would revitalize Japanese agriculture and enhance its international competitiveness, much as had been done in South Korea as a way to alleviate farmers’ opposition to the Republic of Korea–United States Free Trade Agreement (KORUS). (The Korean measures had their effect and 2011 farm exports doubled over their level four years earlier.) Such an effort to enhance the global competitiveness of Japanese farms makes sense. The value of the global agricultural market is expected to surpass $2 trillion by 2013 (The Nikkei Weekly, April 30, 2012). However, the Ministry of Agriculture, Forestry, and Fisheries has been loath to embrace the possibilities for transforming Japanese agriculture from its almost exclusive focus on the domestic market by encouraging farmers to move toward enhanced global exports of more niche-oriented products. Japan in 2009 was the fifth largest producer of agricultural goods (behind China, the US, India and Brazil) but Japan’s farm exports in that year were a rather miniscule $3 billion, well below South Korea’s, leaving Japan with an agricultural trade deficit of nearly $50 billion (The Nikkei Weekly, April 16, 2012).

The Task of Reform Remains

Although Noda has made various policy proposals designed to end the stranglehold of anti-reformist forces in the DPJ and in society more generally, he faces considerably stronger headwinds than did Koizumi a decade earlier. Noda’s party has yet to be convinced that it needs him at the head of the party to ensure electoral victory; Noda lacks Koizumi’s media talents; and the public shows far less support for his actions than it did for those of Koizumi.

With public support for the DPJ below 25 % and that for the LDP barely above that level, it is not surprising that the media and the public have lately shown such enthusiasm for Hashimoto Tōru and his Osaka Ishin no kai (Osaka Restoration Association, or One Osaka). Like Koizumi, Hashimoto is media-savvy, projects a can-do decisiveness, and has an air of youthful urbanity. Combined with his ties to Ozawa Ichirō and Tokyo governor Ishihara Shintarō, he and his party could well become the core of a new national party. Yet it is not at all clear that any such party, even if internally cohesive, would opt to focus its energies on revitalizing Japan’s economy. For the moment Hashimoto’s attentions have been primarily on the question of nuclear power and on enhanced administrative efficiencies and loosening the control of Tokyo over local affairs.

The most fundamental need for Japan’s political economy today is a government that can forge a growth model to create new demand and new jobs in an increasingly competitive globalized world. A number of impediments continue to block that development, not least of which involves the internal divisions within the DPJ. Japan has had eighteen prime ministers in the last twenty-five years and virtually all—with the possible exception of Koizumi—have left little memorable impact. Until a party leader emerges who can command the loyalty of his backbenchers—whether by threatening them with party expulsion or enticing them to loyalty by promises of future rewards or some mix thereof—Japanese politics is likely to sway back and forth with little consistent direction. Democracy recognizes the reality of conflicts of interests, power competition, and dissent—whether within a political party or within the country as a whole. And democracy must always strike a balance between majority rule and respect for minorities. But respecting dissent in a party and minority rights in a country does not mean granting those dissenters or minority groups a veto power over any and all actions with which they disagree. Effective governance demands that decisions must be made in a timely fashion and inevitably deciding creates groups of winners and losers. Whether Japanese politics can move toward that goal is perhaps the most critical question the country now faces.

(Originally written in English at the end of May 2012.)