Sustainable Policies


Economic Policies

Making modest but insufficient economic progress, Japan falls into the lower-middle ranks with regard to economic policy (rank 28). Its score on this measure has improved by 0.1 point relative to 2014.

The country has experienced an exceptionally long economic upswing. However, actual growth rates were only 0.8% in 2018, down from 1.9% in 2017. A 2% inflation-rate target has as yet proved unattainable. Consumption and domestic investment have remained sluggish, and it has proved difficult to compensate for the negative effects of an aging and shrinking workforce.

Unemployment rates are very low, though non-regular jobs remain common. A new labor-standards law caps the amount of allowed overtime hours, and seeks to address the wage gap between regular and non-regular jobs. Corporate tax rates have declined in recent years. The consumption tax was increased after long delays.

Public debt levels are very high and continuing to rise, with deficits large. Government plans to achieve a primary budget balance have been pushed forward to 2025. Interest rates remain low, in part because public debt is held largely by domestic investors. A new high-priority “Moonshot” research initiative is intended to help solve major applied-sciences problems such as carbon emissions.

Social Policies

Facing equity and sustainability concerns, Japan falls into the middle ranks (rank 22) in the area of social policies. Its score on this measure has improved by 0.4 points since 2014.

While education system is generally strong, a number of reforms are underway seeking to improve creativity and add digital elements to the curriculum, for example. Rising income inequality is creating access restrictions. Poverty rates have risen in recent years along with inequality. Gender inequality remains a serious issue. The population of “socially withdrawn” people is growing.

The high-quality healthcare system offers universal access, though a structural deficit has persisted despite increases in state support. Labor-force participation rates among women have improved, but the majority of employed women work part time or in non-regular jobs. The government has made efforts to expand childcare capacities.

Population aging threatens the viability of the pension system. An advisory panel has proposed raising the pension-eligibility age to 70. A series of piecemeal measures have in sum expanded the inflow of foreign workers considerably, though immigration policy remains restrictive overall. Crime rates are low.

Environmental Policies

Despite a continued lack of clarity over future energy policy, Japan falls into the upper-middle ranks (rank 15) with regard to environmental policy. Its score on this measure has improved by 0.4 points relative to 2014.

After the complete shutdown of all nuclear reactors following the Fukushima disaster, nine had restarted by mid-2019, following new, stricter safety standards. The government has said nuclear power will remain a part of the energy mix. A strategic plan envisions a 22% to 24% share for renewable energy and a 20% to 22% share for nuclear energy by 2030.

The country is the second-largest per capita user of single-use plastic packaging in the world, following the US. The 2030 goal of a 25% reduction in single-use plastics is less ambitious than such plans elsewhere. A forest-management law promotes forestry commercialization, which could conflict with environmental goals. Substantial progress has been made in wastewater management.

The cabinet has approved a plan to reduce greenhouse-gas emissions to zero during the second half of the century. The country’s resistance to giving up whaling remains a high-profile and emotional issue.

Robust Democracy


Quality of Democracy

With a number of varied concerns, Japan’s democratic system scores relatively poorly in international comparison (rank 34). Its score on this measure has fallen by 0.5 points since 2014.

The party- and campaign-financing system lacks transparency, and funding scandals remain alarmingly common. Lower-house electoral districts have been redrawn to diminish size disparities. Disparities in upper-house district sizes have been ruled unconstitutional by courts.

The government has actively acted to block access to records, or in some cases deliberately failed to keep records of key meetings. The print and broadcast-media sectors are oligopolistically controlled. Government pressure has led to policy changes at some major media outlets. Citizens enjoy considerable predictability with regard to the rule of law.

Gender discrimination remains significant. While civil rights are generally protected, law enforcement has broad powers over suspects. Anti-terror measures passed in preparation for the 2020 Olympics expand police powers, with critics charging that they undermine existing rights. Right-wing activism, including hate speech, is on the rise. Human trafficking remains a serious problem.

Good Governance


Executive Capacity

Despite an ongoing shift of power toward the core executive, Japan receives middling scores overall (rank 18) in the area of executive capacity. Its score on this measure has improved by 0.2 points since 2014.

Policymaking has become increasingly centralized. Planning on key issues is carried out by the prime minister’s Cabinet Office. Significant numbers of political appointees within each ministry help the prime minister shape policy proposals. The large Cabinet Secretariat has significant sectoral expertise. Many sensitive issues are negotiated informally, with cabinet meetings largely a formality.

RIAs are widely performed, but oversight and quality control are weak points. Ministries make considerable effort to engage in ex post evaluation of policies. The government has failed to realize major aspects of its economic and structural-reform program. Constitutional revision remains a controversial issue. The prime minister has retained his control over subordinate ministers.

Regulatory enforcement is in some cases biased toward the interests of large enterprises. A new plan is providing special assistance to 82 regional cities. The government been increasingly active in regional development programs competing with China’s Belt and Road Initiative. Tensions with China have relaxed, but relations with South Korea are at a low point.

Executive Accountability

With a mixed record on accountability issues, Japan falls into the lower-middle ranks (rank 27) with regard to executive accountability. Its score has improved by 0.4 points relative to its 2014 level.

A substantial amount of policy information is available to citizens. However, levels of public trust in the government are low. While occasionally critical of government policy, the major traditional media organizations do little to expose major scandals. New online sources of news are gaining influence, but are contributing to the emergence of partisan media.

The parliament has broad oversight powers, and members have substantial policy-assessment resources at their disposal. The Board of Audit successfully plays a watchdog role, though is sometimes ignored by core government institutions. A data-protection entity has been recently established, and has proposed tightening personal-data regulations.

The governing LDP party is increasingly centralized. The biggest opposition party recently split, leaving the country with only a single large, stable party. Economic organizations are well-funded and sophisticated. Civil-society groups have played an increasing role in expressing public concern and organizing mass rallies, if sometimes with little visible effect on policy.
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