The decline of policymaking

by Shinji Fukukawa

I have misgivings about the decline of Japanese policymaking abilities.

Politics, on the basis of democracy, should have the functions of making decisions on fundamental national policies, making budgets and laws, and settling financial accounts. Administration, on the other hand, is in charge of justly and efficiently administering budgets and laws, following the policy formed by politics.

But if optimum policy development is to be obtained, administration should make policy proposals to politicians and the people based on insight derived through experience.

At the same time, it may also be a way of optimizing policies if companies — operators in a market economy — and think tanks commissioned to make economic analyses actively make policy proposals. In choosing a policy, it has recently become a common practice to seek opinions of not only an advisory council made up of experts and scholars but also of the public through “public comment.” These represent official efforts toward creating the best possible policy.

What is needed when selecting a policy is to sufficiently examine its necessity, efficacy and side effects. The deregulation of the Temporary Workers’ Law, for instance, has caused a notable expansion in the number of part-time employees and created an insecure job situation in a large segment of the working population. Policies toward privatization of government-affiliated financial institutions have been revised, after all, so that many of their former functions might be restored. The medical care policy for citizens aged 75 or older is also under severe criticism.

I have already indicated that the policymaking abilities of contemporary political parties and politicians are lower than their predecessors as a whole. Administration, which played a remarkable role in achieving Japan’s postwar recovery and high economic growth, now appears to have little confidence in itself, coming under fire for repeatedly making wrong policy judgments and occasional scandals.

Of course, administration should reflect upon these failures, but the market truly has great expectations toward administration making proper policy proposals.

Think tanks in the United States and Europe are actively making policy proposals, and are even providing reserve forces of politicians. They are mostly independent and policy-oriented and continuously present objective and persuasive policy proposals. Whereas, think tanks in Japan are mostly affiliated with private companies and generally lack ability to form public-policy proposals.

In Japan, the disclosure of administrative information has not yet progressed enough, making it difficult for private thinks tanks to deliver really good public policy proposals. If it is to encourage the private sector to make more and better policy proposals, information sharing should be promoted among politics, administration and private people.

Japanese media share responsibility for making policy debates dull or less lively because they are focusing too much on reports about intraparty power struggles, personnel affairs and scandals, when instead they should be playing a role in making political parties compete for important policy choices.

The Liberal Democratic Party had consistently and single-handedly been in political power since the establishment of the so-called 1955 system under which the LDP and the Japan Socialist Party stood out, up until 1993 when Morihiro Hosokawa formed a coalition government. The LDP, founded in 1955 with the merger of the Liberal Party and the Democratic Party, believed in liberal conservatism and was dominated by intraparty factions.

In the 1960s, Hayato Ikeda and Eisaku Sato, both of whom were politically connected with Shigeru Yoshida, led the LDP, and since after 1972, Kakuei Tanaka, Takeo Miki, Takeo Fukuda and Masayoshi Ohira successively came to power. After a while, Yasuhiro Nakasone succeeded Zenko Suzuki as prime minister.

During the 1960s and 1970s, the Japanese government had a host of problems and matters to address — liberalization of trade, foreign exchange and capital transactions, the fixation of the Japan-U.S. Security Treaty, plans to double national income, reversion of Okinawa to Japan, Japan-U.S. textile talks, plans to remodel the Japanese archipelago, “Nixon shock,” the oil crisis and restoration of Japan-China diplomatic relations as well as reform of industrial structure.

In facing these issues, government officials actively made policy proposals in an effort to help the ruling party and its Cabinet solve political issues. Political leadership who were leaders made appropriate political decisions, while major LDP factions were struggling to expand their power bases but did not forget to coach junior fellow politicians.

Whenever a change of Cabinet took place, factional disputes intensified. The most typical instance of all in recent history occurred in 1979 when Ohira was prime minister after beating Fukuda in a 1978 LDP presidential election. Ohira dissolved the House of Representatives for a general election in 1979, resulting in a major setback for the LDP in the election and causing the so-called 40-day dispute within the party that threw the ruling party into confusion.

Although Ohira managed to continue to be prime minister by beating Fukuda in the prime minister nomination vote, a no-confidence motion against his Cabinet submitted by the opposition forces in May 1980 was approved by a majority because some LDP lawmakers also voted for it. Ohira then dissolved the Lower House for general elections, making the Lower House election happen simultaneously with a triennial Upper House election. He died of heart failure during the campaign period and the LDP won a landslide victory.

The 40-day dispute ended with the landslide, leading the politicians involved to feel tired of factional disputes. Subsequently, though the factions continued to exist, there appeared a trend toward attaching importance to building party consensus through talks. This trend continued into the 1990s and contributed to creating a situation where Cabinet posts and executive party posts tended to be allotted in proportion to the size of a faction, and where the number of successful elections to the Diet a politician enjoyed tended to be regarded more important than his or her political ability in the party process of choosing politicians for those posts.

In those days it took political bosses much money to campaign and expand their influence, which led to popularizing the term “money-power politics” or plutocracy. Government ministries and agencies that wanted to get big appropriations for public-works projects and others were inclined to turn to influential politicians for assistance, who in return explicitly or implicitly asked the bureaucrats concerned to provide them with facilities for electioneering and other purposes.

This cozy relationship between some conservative politicians and bureaucrats lasted for a while, until money-related scandals involving them frequently came to the fore. The LDP lost a majority in the general election of 1993 due to the public criticism of money-power politics and ended its nearly 40-year-rule when Kiichi Miyazawa was president of the party.

Morihiro Hosokawa, replacing Miyazawa as prime minister, established an eight-party coalition government free from the LDP. But Hosokawa was replaced by Tsutomu Hata in a less than a year due to differences within the coalition and his own political funds problem.

In 1994,Tomiichi Murayama, then head of the Japan Socialist Party, unexpectedly became prime minister, supported by the LDP and New Party Sakigake. Subsequent political realignment led to the creation of an LDP-Komeito coalition, which continues today.

The Japanese economy fell into a serious recession in the 1990s with the burst of the so-called bubble economy and mismanagement of economic policy. This period is now called the “lost decade.” A lot of administrative scandals have occurred. There were omissions of pension records and leakage of secret defense information. Corruption cases involving bureaucrats greasing the palms of bureaucrats also occurred.

While Japan was reeling under perennial stagnation in the 1990s, the U.S. entered a period of growth thanks to deregulation and the IT revolution, and in Britain growth was sparked by the financial big bang and privatization of national enterprises. Japanese leaders gradually came to think that relaxing administrative regulations is essential to revitalizing the economy. Private business circles also strongly called for deregulation, while some government offices came under severe criticism from the public for trying to maintain their regulations and vested interests.

In the meantime, awareness that politics-led policymaking is necessary became prevalent, and the push for deregulation — “from the public sector to the private sector — and devolution — “from the center to the local” — became firm. Administrative offices were regarded as opposing these changes, and this created a drive for administrative reforms and reform related to public-service workers.

The LDP and other parties have prepared their manifestos for the Aug. 30 general election, most of which call for the discontinuation of control by Kasumigaseki or the bureaucrats.

Shinji Fukukawa, formerly vice minister of the Ministry of International Trade and Industry (now the Ministry of Economy, Trade and Industry) and president of Dentsu Research Institute, is currently chairman of the Machine Industry Memorial Foundation.