Understanding governance in contemporary Japan

Transformation and the regulatory state

Masahiro Mogaki

• Publisher: Manchester University Press
• Year: 2019
• Print ISBN: 9781526114686
• eBook ISBN: 9781526114709
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Comparative Politics
• Index: Politics & International Relations

This book explores the transformation of the Japanese state in response to the challenges of governance by focusing on two case studies: ICT regulation and antimonopoly regulation after the 1980s, which experienced a disjuncture and significant transformation within the period with approaches embracing competition. In so doing, it reveals the transformation of the state and governance in a Japanese context and presents itself as an example of the new governance school addressing the state, its transformation, and the governance of the political arena in Japanese politics and beyond, setting out a challenge to the established body of pluralist and rational choice literature in Japanese politics. With its comprehensive review and analysis of the theory and development of Japan's contemporary politics, this book is suitable as a textbook for undergraduate and postgraduate courses as well as a guidebook for practitioners engaging in policies and businesses relating to Japan.

Part I

Conceptualising the Japanese state and governance

1

Introduction: transformation, governance and the state in the Japanese context

The 2010s have seen a significant transformation in politics. The established governing regimes across the globe have been confronted by challenges that have undermined their traditional foundation of governing. The outcomes of the 2016 US presidential election and the 2016 referendum regarding the UK’s EU membership can be interpreted as a wave of populist nationalism occurring on the home territory of classic, liberalist, Anglo-Saxon areas (Fukuyama 2017). This set of political upheavals accompanied the emergence of administrations concomitant with nationalist and populist discourses in a number of countries in Europe, Asia and Latin America, whose key characteristics include a challenge to established political norms within their respective political arenas. This set of events indicates that the established governing system is facing significant political challenges across the globe. Societal problems beyond the scope of the established governing mechanism have been highlighted as a key factor in mobilising the rise of populists and nationalists (Fukuyama 2016). A possible interpretation is that political regimes throughout the world are facing the ‘challenge of governance’, a term that expresses political developments since the 1970s. Indeed, developments characterised by the emergence of significant challenges to the established political system in the 2010s have a parallel in political developments after the 1970s. Therefore, exploring changes of governance is vital in addressing contemporary political challenges and the historical development of political arenas. This book will analyse the case of Japan as a specific example of changes of governance.

Given Japan’s significant economic and industrial decline in the world’s politico-economic arena and its slow response to globalisation and internationalisation in the 2010s, some readers may doubt the benefit of exploring the Japanese case. I offer the following reasons for examining the governance of Japan. First, its long history as a developed country outside Europe and America offers an example of the generalisable nature of political and economic issues beyond the specific context of western Europe and America. Second, although its relative decline in terms of economic size is inevitable, Japan retains its position as a large country significant enough to influence its region and beyond. The challenges to Japan are issues that others (e.g. Europe, China) are also facing, or will confront in the near future, such as regulatory transformation and governance. And lastly, the governance of Japan has been little explored. Indeed, in spite of works by scholars and journalists focusing on specific issues such as political groups, bureaucracy, societal issues, foreign policy and economic issues, few have explored changes of governance in Japan’s political and economic arena as their core theme. The following section will consider the development of governance in Japan, heeding key political issues specifically affecting the course of the country’s political development.

Governance, Japanese style

In the past forty years there has been a significant growth in the literature on governance within political science, in part as a response to the decline of the state’s traditional role and capacity in developed countries. The governance literature seeks to offer new forms of analysis of governing systems in the transforming political arenas after the 1980s. This new set of approaches has prompted a renewed debate on the state. The debate on governance has helped bring the state back into political science literature partly because the period during which government was supposed to address many of the key political issues in society was replaced by a new era in which the term ‘governance’ was employed to address the set of governing processes. That is, examining ‘government’ no longer always responds to the issues of governing. Elsewhere, the concept of the state, not always heeded by political research despite its traditional significance, has re-emerged as a topic of debate in addressing political issues in transforming society. I define ‘governance’ here as the set of political systems that governs the state and society; the scope of the term covers the nexus of public administration actors and structures that are influential over policy-making and implementation, both those within the government and beyond.

The analysis of Japan’s political arenas was dominated by approaches focusing on central government officials as key before the 1980s (Tsuji 1969; Johnson 1982). This reflects a period dominated by the stable administration of the Liberal Democratic Party (LDP), which had enjoyed continuous tenure since its establishment in 1955. In particular, the 1960s and early 1970s saw significant economic development called the ‘High Growth Period’ under the Hayato Ikeda (Prime Minister, 1960–64) and Eisaku Satō (Prime Minister, 1964–72) governments, in which the impact of government policy was regarded as a significant factor contributing to the rapid rise of living standards in the country. Although the nature of this rapid economic growth is a contentious topic, many recognise policy-making processes steered by government officials and overseen by LDP politicians as influential (Johnson 1982). This set of governing mechanisms had analogues to the Weberian state model. Unusual in Japan was the significant impact of ruling party politicians outside the Cabinet: they exerted influence over policy-making within the LDP’s informal policy-making bodies including the Policy Affairs Research Council (PARC). They belonged to a community in which groups of politicians (Zoku gi’in) specialised in specific fields, many of whom were former Cabinet ministers responsible for particular policy areas (Inoguchi and Iwai 1987).

In the 1970s Japan encountered significant political and economic crises. The emergence of corruption scandals culminated in financial scandals involving Kakuei Tanaka (Prime Minister, 1972–74) and the Lockheed bribery scandals in 1976, part of which also directly involved Tanaka. These scandals resulted in public anger against the LDP and undermined its popular support. The 1973 oil crisis and the series of economic measures by then US President Nixon called the ‘Nixon Shock’ led to the end of the Bretton Woods system of monetary management. The concomitant economic turmoil prompted corporate scandals including price controls on everyday commodities by trading companies and cartels. The response to these political and economic crises was the gradual transformation of the LDP and political and economic structures. The financial scandals in the 1970s involving LDP politicians prompted strong antagonism against ‘money politics’ (kinken seiji), significantly exacerbating public distrust of the political system and politicians. The economic crisis led to a call for administrative reform, which was the prioritised project of the Yasuhiro Nakasone government (1982–87). Although the resulting privatisation of three public corporations (telecommunications and tobacco in 1985, railways in 1987) attracted significant attention, the impact of neoliberal policies was generally limited in the 1970s and 1980s because established and persistent political and economic structures resisted neoliberal reforms. Indeed, Japan has sometimes partially promoted policies based on a market-oriented philosophy, but it has been reluctant to thoroughly embrace them (Pierre and Peters 2000: 3) so as to protect its embedded structure. As such, governing in the 1980s retained the traditional approach mobilised by the government, although the influence of Zoku gi’in on policy-making processes increased (Inoguchi and Iwai 1987).

Transformation gradually emerged in the 1990s, prompted by a set of reforms including the 1994 political reform and the 1997 administrative reform, with concomitant societal changes. The 1994 political reform set out to address public anger against the LDP prompted by scandals involving several top LDP politicians in the late 1980s, such as the Recruit scandal in 1988 and Tokyo Sagawa kyūbin scandal in 1992. A key component of the reform was the replacement of the traditional single non-transferable voting (SNTV) system with the mixed-member majoritarian (MMM) system, together with the introduction of public funding for political parties. The impact of the electoral system changes reshaped the organisation of political parties. As members of the House of Representatives (Shūgi’in) are now selected from single-member districts (SMDs), where only a single candidate is elected as the representative, using the proportional representation (PR) system drawn from the party’s PR candidate list, top party officials obtain significant leverage to administer their party by authorising candidates. The introduction of the government subsidy to political parties and concomitant restrictions on private entities’ direct funding of each politician have set the framework that regulates Japan’s political parties’ finances. Under the new system, the party management receives government funds to allocate to local party branches headed by Diet members or their candidates. As Japan’s Diet employs a bicameral system, with the power of the House of Representatives being superior to that of the House of Councillors in selecting a government, the impact of the reform was significant enough to reshape Japan’s political landscape.

A key outcome of the 1994 political reform was the centralised power of party management within the respective parties, which has contributed to shaping a stronger Prime Minister and Cabinet since the 2000s. Another key contributory factor shaping a strong central government was the 1997 administrative reform adopted by the Ryūtarō Hashimoto administration in 1997, which strengthened the power of the Prime Minister and the Cabinet in relation to bureaucracy, together with the reorganisation of government organisations and the establishment of independent administrative agencies (dokuritsu gyōsei hōjin). After its implementation in 2001, the 1997 administrative reform transformed the civil service, which had been a key body of administrative power, into a set of organisations more systematically administered by the Prime Minister and the Cabinet. The explicit impact of this set of reforms was observed in the political project under the Jun’ichirō Koizumi administration (2001–06). The enactment of the 1998 Non-Profit Organisation Law also established the institutional foundation of non-government organisations in Japan, which have the potential to address activities traditionally overseen by the government. Although this has augmented the development of the sector, the organisations have not significantly affected the development of governance in Japan with either sizeable professional groups or clear strategies influential over the public sphere and policy-making (McCargo 2013: 179–80).

Although Japan’s transformation of the state and governance attracted scholarly attention in the 1990s, its explicit impact was widely observed in the 2000s, including the tenure of the Koizumi administration. The LDP administration in this period saw the gradual and piecemeal development of elected officials, for example the Prime Minister and Cabinet ministers, who mobilised popular support through engaging in politicisation, and the contrasting decline of ruling party politicians outside the Cabinet – although some Cabinets had a comparatively short tenure. A key issue of the LDP administration in the 2000s was party governance. Indeed, a major challenge to the Koizumi government was its internal opponents within the LDP itself rather than opposition parties. The change of power relations within the LDP from politicians outside the Cabinet to Koizumi, the Kantei (Prime Minister’s Office) and his ministers culminated in the 2005 postal reform and his victory over internal enemies within the LDP. After Koizumi’s landslide victory in the 2005 general election, he dominated the country’s political arena with unchallengeable power within the LDP in addition to the LDP’s overwhelming majority in the National Diet. Koizumi’s example exhibits the growing power of the Prime Minister and the Cabinet vis-à-vis politicians outside the Cabinet.

Elsewhere, the transformation of the relationship between the state and society after the 1990s through the reforms of regulation and public spending gradually changed the nature of government officials in policy-making. As typically observed in Information and Communications Technology (ICT) regulation, the bureaucratic approach gradually shifted its focus from discretionary measures including market entry permissions to those based on rules such as overseeing network interconnection disputes (Mogaki 2015). In particular, the policy projects explicitly mobilised by neoliberal rhetoric with the mantra of Kan kara min e [from the official to the private] under the Koizumi administration aimed to reform established economic structures, exemplifying reformist politics in the 2000s. The administration pursued spending cuts in public investment, privatisation (e.g. highways, postal services), deregulation and devolution through its prioritised structural reform projects. Together with the impact of the 1997 administrative reform, this set of measures reshaped the nature and power of civil servants in policy-making, who gradually refrained from acting as strategists. The government change from the Liberal Democratic Party to the Democratic Party of Japan (DPJ) that resulted from the landslide victory in the 2009 general election provided an explicit indicator of this trend.

Despite significant popular support in the 2009 general election, governance under the DPJ administration between 2009 and 2013 can be characterised by its unsystematic approach to governing and resulting turmoil, the insignificant impact of its domestic policies, and unpopular crisis management (RJIF 2013). The administration intended to replace the previous public policy-making processes under the LDP administration with its own, in which the Cabinet functioned as the sole body responsible for policy-making; for this purpose, it abolished its Policy Research Committee (PRC), the equivalent of the LDP’s PARC. This measure did not work because of the DPJ’s failure to incorporate bureaucracy smoothly into its policy-making machine. Rather, what the DPJ did was a gradual regression to the traditional approach established by the LDP through the revival of the PRC and its enhancement. In this way, the impact of the DPJ administration was not as striking as many observers in...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of figures and tables
• Preface
• Acknowledgements
• Abbreviations
• Part I: Conceptualising the Japanese state and governance
• Part II: Evolving regulation and governance
• Part III: The nature of Japanese governance with the transformation of the state
• Appendix 1 List of Ministers of Post and Telecommunications (before January 2001) and Ministers of Internal Affairs and Communications (after January 2001)
• Appendix 2 The anti-monopoly case process
• References
• Index