Policy Performance


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 remained modest at about 1.7% in 2017, with lower rates forecast for 2018 and 2019. A 2% inflation-rate target has been pushed back to 2020. Successive fiscal-stimulus programs have raised further fiscal-consolidation concerns. The country led efforts to conclude a revised trans-Pacific free-trade agreement.

Unemployment rates are very low, though irregular 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 over recent years. A consumption-tax hike has been persistently delayed, with its expected proceeds no longer earmarked solely for debt reduction.

Public debt levels are very high and continuing to rise, with deficits large. Government plans to achieve primary budget balance by 2020 have been pushed forward to 2025. Interest rates remain low, in part because public debt is held largely by domestic investors. A decline in various R&D indicators is diminishing the country’s status among the top technology nations.

Social Policies

Facing equity and sustainability concerns, Japan falls into the middle ranks (rank 23) in the area of social policies. Its score on this measure has improved by 0.2 points since 2014.

The education system is generally strong. Current policies focus on free early-childhood education and free higher education, while addressing issues raised by expensive private high schools. Some concern over the effectiveness of past tertiary reforms is evident. Income inequality and poverty rates have risen in recent years. The government has expanded its growth policies to include social-inclusion issues.

The high-quality health care 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. Kindergartens have begun accepting two-year-olds, and have reduced their waiting lists to 10-year lows.

While population aging threatens pension-system viability, inflation-indexed benefit increases have been slowed. Immigration policies are very restrictive, but rules have been relaxed for highly skilled foreign professionals, with a new five-year residence visa granted to some low-skilled workers. Crime rates are low.

Environmental Policies

With post-Fukushima energy policy remaining controversial, Japan falls into the upper-middle ranks (rank 14) with regard to environmental policy. Its score on this measure has improved by 0.5 points relative to 2014.

Nuclear power plants have restarted following the Fukushima disaster, but concerns continue to keep this process slow. A new strategic plan envisions a 22% to 24% share for renewable energy and a 20% to 22% share for nuclear energy by 2030. Concerns are rising that wind parks and large solar fields may threaten the environment.

A new forest-management law promotes the commercialization of forestry, which could conflict with environmental goals. Biodiversity remains on a long-term path of decline despite recent proactive measures.

The country has said that climate change and ocean pollution will be high on the agenda for the G-20 summit it is hosting in 2019. The country’s resistance to giving up whaling remains a high-profile and emotional issue.



Quality of Democracy

Despite fair and open elections, Japan’s democratic system scores relatively poorly in international comparison (rank 33). Its score on this measure has fallen by 0.3 points since 2014.

The party- and campaign-financing system lacks transparency, and funding scandals remain alarmingly common, though no major incident emerged during the review period. Lower-house electoral districts have been redrawn to diminish size disparities, but an addition of new seats for a densely populated upper-house district was criticized as benefiting the governing LDP coalition.

In several public instances, the government has sought to block public access to records, or even deny that such records existed. The print and broadcast-media sectors are oligopolistically controlled, while online media sources provide more pluralistic, but often one-sided perspectives. Regulations block the use of a false online identity to make political social-media postings.

Civil rights and political liberties are generally protected, but gender discrimination remains significant, with sexual harassment laws inadequate. 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.



Executive Capacity

Despite an ongoing shift of power toward the core executive, Japan receives middling scores overall (rank 19) in the area of executive capacity. Its score on this measure has improved by 0.1 point since 2014.

Key policy planning 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.

Regulatory enforcement is in some cases biased toward the interests of large enterprises. The government has promoted a regional infrastructure-investment program competing with China’s Belt and Road Initiative. E-government efforts are designed for citizen interaction rather than intergovernmental coordination.

Executive Accountability

With a mixed record on accountability issues, Japan falls into the lower-middle ranks (rank 29) with regard to executive accountability. Its score has improved by 0.3 points relative to its 2014 level.

Citizen policy knowledge is reasonably robust. However, the 3/11 disasters undermined public trust both in government information and in leading media organizations, with recovery still ongoing. 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 exacerbating political polarization.

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, but its operations remain in flux.

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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