Japan experienced considerable turbulence in its political system during the course of the reporting period. In September 2007, incoming Prime Minister Yasuo Fukuda took charge of a coalition government led by the Liberal Democratic Party (LDP). This lasted only one year, but was succeeded in September 2008 by a cabinet led by Prime Minister Taro Aso, supported by the same coalition. This in turn was ousted following the lower house elections of August 30, 2009, and replaced by a cabinet led by Prime Minister Yukio Hatoyama, heading a coalition including the Democratic Party of Japan (DPJ) and two smaller partners. This was the first departure from LDP-dominated cabinets since the LDP was formed in 1955, apart from a relatively short period from 1993 to 1994.
This unsteadiness reflects deeper concerns over the state’s ability to handle the country’s pressing socioeconomic and political issues. In terms of policy-specific performance, Japan has been unable to transform a moderate but stable post-2003 economic upswing into a sustainable growth model. The nation’s overall debt ratio of around 200% is alarming, and substantially reduces the available scope for fiscal activities. In social policy, successive governments have been unable to create a sustainable framework for dealing with topics such as pension reform, integration of foreign residents, or the full utilization of women’s labor force potential. Given the worsening income distribution and the rise in poverty in recent years, voters have become increasingly disenchanted. While the foreign policy performance has largely been stable, the wavering of the new DPJ-led government between a pro-American orientation and a focus on playing a larger Asian role has added some uncertainties even in this area.
The existing institutional framework has not helped the government overcome the mounting challenges. True, the constitution provides for only a few institutional veto players, a fact which in theory might constrain majority-oriented policy-making. Moreover, the Japanese prime minister enjoys – at least in formal-institutional terms – a relatively powerful position within the executive. However, prime ministerial or indeed core-executive leadership has been the exception to the rule under LDP rule. An array of norms and institutions has contributed to the apparent disparity between the political system’s formal-institutional setup and the reality of limited reform ability at the top level. To recalibrate the system of governance, former Prime Minister Junichiro Koizumi (2001 – 2006) tried to install strong top-down decision-making structures that would allow the introduction of essential policy reforms despite the opposition of vested interests, culminating in a strong Cabinet Office and organs such as the Council for Economic and Fiscal Policy. However, rather than pursuing this course farther, succeeding prime ministers more or less returned to the former system of government.
One of the key initial proposals of the Hatoyama cabinet centered on a return to this kind of top-down decision-making structure – this time in the context of the cabinet – by establishing a National Strategy Bureau (NSB) and procedural mechanisms designed to guarantee the dominance of appointed politicians over bureaucrats. After a few months, the problems with this approach remain more visible than the successes. Power struggles between politicians continue, the legal basis for the NSB has not yet been established, and the economic and fiscal scope for decisive policy initiatives, particularly to support the “People’s Lives First” program outlined in the DPJ election manifesto, looks little brighter than in recent years. It should be noted, however, that the DPJ and its partners are in fact laying the foundation for a new approach within Japan’s political system, which some observers have gone so far as to call “revolutionary.”