End of the Road? What the Osaka Referendum Rejection Means for Ishin, Osaka, and Japan

An Osaka Proposal Falls Short Again

On November 1, residents of the city of Osaka cast their ballots for the second time in five years on a referendum asking whether to abolish the city and merge its 24 wards into 4 as part of a metropolitan district to replace Osaka Prefecture. The result—50.6% opposed to the measure, with a voter turnout of 62.4%—was virtually identical to the narrow defeat of the proposal in 2015, when 50.4% were opposed on a turnout of 66.8%.

The defeat raises some existential questions about the future of Nippon Ishin no Kai (the Japan Innovation Party), the Osaka-based party behind this plan. Despite Ishin’s persistent efforts to convince residents of the plan’s merits over the past decade, the party’s flagship policy has reached the end of the road. Acting leader of Ishin’s regional party in Osaka, Osaka Governor Yoshimura Hirofumi, firmly promised that he will not attempt this merger plan a third time. And Ishin’s national party leader, Osaka Mayor Matsui Ichirō, announced that he will take responsibility for the result by retiring from politics at the end of his term in April 2023.

The referendum’s rejection reflected a number of factors. Exit polls suggest that a little less than half of Kōmeitō supporters backed the plan, despite the party leadership reversing its earlier position to back the merger. This was unexpected, as Kōmeitō supporters are generally seen as disciplined in following the lead of party headquarters.

But perhaps most vital to the outcome was a large number of Osaka residents supporting Ishin and its leadership, but still skeptical of its merger plan. In NHK exit polls on the referendum day, 73% of Osaka residents said they were satisfied with Ishin’s administrative governance in both the city and prefecture. But compared to 2015, those who said they support Ishin were not unanimous in backing the merger, with some 10% opposed to it. Various earlier polls point to high levels of support for Governor Yoshimura and especially his recent handling of the pandemic. And yet voters rejected the party’s central policy proposal. In effect, Ishin had become a victim of its earlier successes.

Victim of Its Own Success

Over the last decade, Ishin has argued that the merger is necessary because Osaka prefecture and city are in a “dysfunctional” relationship. This fushiawase—punning on the words fu (for prefecture), shi (for city), and awasu (coming together)—was the source of administrative and investment overlap, futile rivalry, and lack of effective coordination. Yet this divide has in fact been resolved already, thanks to Ishin’s 2011 capture of both the gubernatorial and mayoral seats in Osaka.

Indeed, Ishin by its own admission has claimed that a “virtual” merger has been achieved with the very tight relationship between Governor Yoshimura and Mayor Matsui, ending administrative overlap. Ishin has claimed that Osaka’s recent effective response to the COVID-19 pandemic, successful bid for the 2025 World Expo, privatization of and improvements to the Osaka subway, and merger of Osaka’s municipal and prefectural universities, among other achievements, were thanks to this “virtual” partisan merger between the two levels of government.

Against this backdrop, voters were not ready to take a risk on a drastic institutional reform whose benefits were unclear.

In the lead-up to the referendum, the debate on whether and how much the administrative redrawing of borders and powers would boost Osaka’s economy and create administrative efficiencies had become a partisan swamp. Ishin argued that clearer distribution of competencies and leadership provided by elected special ward mayors, who are closer to the public than the current Osaka mayor, would enable more responsive and tailored policy making. Critics, on the other hand, were adamant that the merger would merely shunt the powers and revenues of the city to the prefecture and reduce the quality of public services. When backing the merger, supporters pointed to Ishin’s track record, which includes remarkable success in reducing the prefecture’s debts and improvements in public services, employment levels, educational attainment, land prices, and crime control. Critics in response pointed out that Osaka’s real GDP has grown more slowly (0.79% annually) than the national average (1.28%) from 2010 through 2016, the latest figures available. They were also quick to note that the net outflow of workers and company headquarters from Osaka to Tokyo has continued, although its pace has been slowing.

Either way, in a world prone to global shocks like the current pandemic, it was difficult for voters to guess how global and regional conditions five years hence would impact the merger. Consider how Ishin had placed inbound tourism, international resorts, and casinos, as well as hosting international conferences, at the heart of its growth strategy. Obviously, COVID-19 has put those best-laid plans awry.

Ishin’s Future as a National Party

For Ishin, reforming Osaka, though a flagship policy proposal, was only one part of a much bigger project. In 2012, Osaka Mayor Hashimoto Tōru and Matsui, then prefectural governor, launched the national arm of the party with a manifesto calling for a “Great Reset” of Japan. The ambition was to achieve ishin (the uncommon word used for the Meiji Restoration, meaning both “restore” and “transform”) by promoting the “autonomy/self-reliance of Japan’s state, regions, and individuals.”

The proposed measures to achieve this amounted to a radical and fundamental redrawing of the architecture of Japan: merging the 47 prefectures into a dozen or so regions (dōshūsei), substantial decentralization, abolishing the House of Councillors, and constitutional reform, among other measures.

After an initial and exciting breakthrough onto the national stage on the back of Hashimoto’s soaring popularity, Ishin’s national fortunes petered out. Years of internal disputes, failure to link up with other opposition parties, and parliamentarian scandals have led to feeble support outside of Osaka. Ishin’s strength has fallen sharply from 54 members in the House of Representatives and 20% of the national vote in the proportional representation tier in 2012 to just 13 Diet members and 6% in 2017. Its party support ratings currently lag at 1.6% in NHK polls and 1.0% in Jiji polls as of October 2020.

In large part, the national failure stems from being unable to offer clear opposition to the ruling party. For most voters, Ishin became indistinguishable ideologically or programmatically from the Liberal Democratic Party on many issues and has come to be seen as its “complementary force.” Ishin’s members themselves would deny this, and claim they are constructively judging the ruling party bills on their merits. But it doesn’t help that Hashimoto and Matsui are famously close to the current prime minister, Suga Yoshihide. During the Abe Shinzō administration, Ishin was courted for parliamentary support to achieve the supermajority necessary for constitutional reform. In turn, the LDP has helped Ishin by passing a special law enabling the Osaka merger plan as well as backing the city’s bid to build Japan’s first-ever casino resort and host the World Expo 2025.

The Regional Party Expansion Model

The more Ishin’s local goals were achieved, though, the further it appeared to be from national power. During this time, it expended much political capital and resources to pursue the Osaka merger plan and local goals. Now that its pet project is finally buried, the question is whether and how Ishin will focus its energies on the national stage.

Initially, the party’s national expansion strategy was to replicate the Osaka model of capturing local power to build up a Japan-wide base in a bid for national power. It was a pragmatic and novel approach to overcome the lock that establishment parties had on local politics over the years.

First, capture the mayorship or governorship with a charismatic leader by sharply criticizing local vested interests, bureaucracy, and political elites; second, carry out drastic cuts to “wasteful” government spending, including salaries of civil servants, executives, and assembly members; third, use these cuts to fund highly visible public services popular with younger families, such as subsidized high school tuition; fourth, back candidates to capture local legislatures united under the mayor and governor; and voilà, use this local base to mobilize support and source candidates for national elections.

In time it became clear that the governor- and mayor-led regional party model was only successful in the city of Osaka and some surrounding municipalities. Beyond these strongholds, it was difficult to sustain political excitement and retain the attention of nonpartisan voters without the kind of combative and media-savvy leadership of party-founder Hashimoto, who was busy in Osaka. What Hashimoto called the strategy of catching the “floaty public will” never turned into a national tailwind for the party.

The Osaka regional party model spawned copies elsewhere, though. Many of them were short-lived, such as Genzei Nippon from Aichi and Tomin First no Kai from Tokyo. Efforts, too, were made to coalesce various local movements into a national force, but to no avail. During this process of seeking to expand nationally, Ishin suffered a critical setback in its botched 2012 coalition with Tokyo Governor Ishihara Shintarō’s ultra-conservative party. More recently it failed to link up with Tokyo Governor Koike Yuriko’s regional party. The reality is that after 10 years, Ishin has no substantial base or pool of candidates to contest national elections beyond Osaka.

Yet Ishin’s leaders still frequently cite their intellectual beacon—the late Sakaiya Taichi, former head of Japan’s Economic Planning Agency and prolific author—and his ideas of “opening up” and transforming Japan. Though they may believe achieving the Osaka referendum is the first step in that direction, 10 years seem a long time in today’s world of hyper-volatile politics.

Beyond Japan, new political parties have captured power in far less time. French President Emmanuel Macron’s party—La Republique En Marche—captured a parliamentary majority a little more than a year after its formation, while the Five Star Movement became Italy’s largest party and entered government five years after first contesting national elections.

Going Beyond the Metropole

The other rationale for the rejected merger was that it was supposed to create a powerful new local government entity—a fukushuto, or “secondary capital,” as Ishin calls it. Osaka would act as a back-up for Tokyo in case disaster strikes.  But it was increasingly unclear why Osaka should be the back-up to Tokyo. Its status as Japan’s second most important city in Japan is on weak ground—Osaka Prefecture was overtaken by Aichi in terms of GDP in 2018, and it is currently third after Tokyo and Kanagawa in population.

Winning the referendum and creating a “secondary capital” was supposed to trigger broader decentralization and dōshūsei. But to achieve that kind of “grand reset” will require national momentum and electoral strength. Simply reorganizing the major cities (or even granting them greater powers) will not dent the most critical issue facing Japan’s political economy: the ever-widening gap between Tokyo and the rest, particularly the rural and semirural outlying regions that are depopulating, aging, and hollowing out economically at ever faster rates.

Thus far, Ishin has not shown much success in expanding and reaching out to these left-behind regions, being preoccupied in its rivalry with Tokyo and making Osaka a more globally competitive city. An agenda of cost-cutting and deregulation, focusing on growth based on inbound tourism and casinos, is not a sustainable agenda even for urban voters, and hardly an attractive one for rural areas.

Some new political compact among Tokyo, the other major cities, and the rest of Japan involving sustainable and growth-generating redistribution of wealth, population, and political power is therefore necessary. Convincing voters in both urban districts and rural LDP strongholds to take a chance on such a new settlement between regions has long been the critical, but unaccomplished, mission for the opposition. And thus far none have been able to offer a compelling argument.

If any party could have achieved this, it should have been Ishin. Though opponents decry the party’s political style as populist and top-down, there is no denying voter interest, and turnout has gone up sharply over the past decade in Osaka elections. Despite being rejected in the referendum, Ishin should be praised for transforming Osaka by seeking and delivering substantial change through the ballot box. Increasing participation without, for the most part, polarizing opinions is also a rare and positive development in this world, where voters are gripped in the extremes of apathy or rage.  Now, if only Ishin or some new political force can replicate its persistence and pragmatism in local politics on the national stage, we may see a real ishin of Japan.

(Originally written in English. Banner photo: Osaka Mayor Matsui Ichirō, at right, and Osaka Governor Yoshimura Hirofumi address journalists on the evening of November 1, 2020, following the referendum rejection of their party’s proposal to reshape Osaka government. © Jiji.)