1 What Is Political Reform?

1.1 De Facto Constitutional Revision

The political reforms undertaken since the 1990s have been extremely far-reaching, targeting the bulk of Japan’s public sector. In their scope and significance, they may even be comparable to the establishment of a modern constitutional state during the Meiji period or the Occupation reforms implemented immediately after WWII. Both of these earlier reforms were accompanied by the enactment of new constitutions: the Constitution of the Empire of Japan, promulgated in 1889, and the Constitution of Japan, promulgated in 1946. By comparison, since the political reforms of the 1990s onward were not accompanied by a new constitution, one might think that they were small in scale. Most people are likely to feel uncomfortable considering the changes in the 1990s alongside those in the early Meiji period and the Occupation period.

However, such a view is narrow-minded with regard to how we should understand constitutions and political reforms. A constitution, in the small-c sense, is not limited to one keystone legal document (the large-C Constitution). Rather, it is a general term for the rules that clarify the loci and wielders of political power and define the scope of political power that can be exercised by various actors, fixed in relation to governing institutions. Let us call them here “governing rules.” While many governing rules are found in constitutions, it is not uncommon for governing rules to be set by laws and customs. For example, the current Constitution of Japan stipulates that the Diet consists of two houses, the House of Representatives and the House of Councillors, but the number of Diet members and the specific methods for electing them are all determined by law. In constitutional law, the governing rules that are not limited to the written constitution are called the “material constitution.”

In the case of postwar Japan, the formal constitution accounts for a small proportion of the governing rules, because of its brevity in terms of both volume and content. Political scientist Kenneth Mori McElwain persuasively notes that this brevity made it unnecessary for postwar Japan to revise the constitution through formal amendments.Footnote 1 It should be noted, however, that this does not mean that postwar Japan did not have to make changes to its governing rules. Rather, the governing rules—the material constitution—have been changed not through amending the formal constitution but through the revision of laws and the formation of new customs. If this is the case, when attempts are made to change the material constitution comprehensively and intentionally, they have significance and effects no different from revising the formal constitution, and it is appropriate to understand these changes as a form of constitutional revision.Footnote 2

The political reforms since the 1990s, which are examined in this book, were attempts to revise the constitution in just this way. By changing the governing rules, which are largely left to law, the project transformed not only the nature of Japan’s politics and government, but also of its state and society, and even the relationship between the public and private sectors. As such, it may even be considered more ambitious than formal constitutional revision. It is not uncommon to see statements that Japanese politics or Japanese people are incapable of self-reform. But even if we set aside the problem that the definition of these terms is unclear and there is no way to confirm whether they are true or false, it is difficult to say that these opinions are consistent with the facts. In fact, it may even be said that it is difficult for a developed country to undertake such large-scale reforms at a time when it is neither in the process of building a modern state nor immediately after defeat in war.

This chapter aims to sketch a complete picture of these attempts and clarify the ideas (perceptions and principles) they were seen to have in common.

1.2 Classification of Domains

In order to draw a complete picture of the far-reaching political reforms, let me begin by classifying them into two broad domains and describing what was done in each. One area is reform of the central government, and the other is reform of areas outside of the central government. The latter can also be called reforms in autonomous domains, in that they are relatively independent of the central government. Of course, the degree of autonomy varies. In some domains, final decision-making authority may be independent of the central government, but actors and institutions may still form close, collaborative working relationships. In other domains, the independence may extend beyond decision-making authority and manifest as limited daily contact with the central government. In other words, this delineation is used simply as a label for easier classification.

In addition to the partition of domains, further sub-divisions are possible based on the substance of specific reforms or even the purpose for which institutions were created or modified. First, for central government reforms, we can demarcate three subcategories: electoral reform, the strengthening of cabinet functions, and the reorganization of ministries and agencies. Electoral reform refers mainly to the passage of Four Acts on Political Reform (Seiji Kaikaku Yon-hō) in 1994: a revised Public Offices Election Act, a revised Political Funds Control Act, the new Act for Establishment of the Council on the House of Representatives Electoral Districts, and the new Political Party Subsidies Act. There were some subsequent changes to the electoral system for the House of Councillors, and the number of members in both houses has been changed repeatedly, but in an institutional sense, the effect of these changes has been relatively small in scale and limited in effect. The strengthening of cabinet functions and the reorganization of ministries and agencies were carried out based on the 1998 Basic Act on Central Government Reform, and they are usually lumped together as “administrative reform” or “Hashimoto reform,” named after the prime minister at the time the legislation was enacted. However, important enhancements of cabinet functions have continued thereafter, including the establishment of the National Security Secretariat and the Cabinet Personnel Bureau in 2014. By contrast, no further changes to ministries and agencies have occurred since the Basic Act on Central Government Reform was implemented in 2001, although debate about the matter has arisen periodically.

Public sector reforms external to the central government (defined here as the legislature and executive) include those of the judiciary and the central bank, and to decentralization. Judicial reform began in 1999 with the establishment of the Judicial System Reform Council, and its direction was set by the 2001 Act on Promotion of Judicial System Reform. Central bank reform centered on the comprehensive revision of the Bank of Japan Act in 1997. Decentralization was launched in 1993 with the Diet’s “Resolution on the Promotion of Local Decentralization.” Further changes have continued to the present day in the form of the Omnibus Decentralization Act of 1999, the so-called “Trinity Reforms” (Sanmi ittai Kaikaku) from 2003 onwards, which focused on the transfer of financial resources (the reduction of subsidies from the central government, the transfer of tax revenue, and the reform and reduction of local allocation tax), and a second round of decentralization beginning with Act on Promotion of Decentralization Reform of 2006.

As the term “separation of powers” suggests, the judiciary, while possessing autonomy, is still a part of the central government—no less so than the executive or the legislature. However, since its independence is ensured at the (formal) constitutional level, it is necessary to treat it separately from reforms of the legislative and executive branches. In the case of the central bank, the institution is by nature essentially a part of the central government, but the Bank of Japan takes the form of a quasi-governmental or special corporation. The judicial branch and the central bank are expected to contribute to the national interest by taking decisions based on different priorities than the legislative and executive branches, such as preventing the misuse of political power or the destruction of an orderly financial system. In other words, they are given institutional independence in order to play their roles as part of the central government. Their reform would naturally be part of political reform.

In the following sections, I will review what has been done in these main domains of political reform.

2 Central Government Reform

2.1 Electoral Reform

“Electoral reform” is primarily associated with the passage of four political reform laws in 1994. These laws introduced a “mixed-member majoritarian” formula for elections, which combined first-past-the-post constituencies with proportional representation for the House of Representatives. They also established a system of party subsidies.

The basis of these reforms was the recognition that the medium-sized, multi-member electoral district system (chūsenkyoku-sei) for the House of Representatives, used since 1947, weakened competition between political parties, inhibited policy formulation and responsiveness, and was a major cause of political corruption. In single-member district systems (shōsenkyoku-sei, also called first-past-the-post systems), the candidate who receives a plurality of votes wins the single available seat. In contrast, Japan’s multi-member district system was one in which two to six candidates were elected from each constituency, in descending order based on votes received.Footnote 3 Multi-member district systems have been quite common in Japan, both historically and at different levels of government. They are also not uncommon when viewed from a global perspective. Japan still uses multi-member districts for the bloc of seats in the House of Representatives that are chosen by proportional representation, with the districts in this case being larger regional areas.

However, in most countries where multi-member districts are established, voters can vote for more than one candidate, either through proportional representation or plural voting. In Japan’s multi-member district (MMD) system, voters could cast votes for only one candidate—the so-called single non-transferable voting (SNTV) rule—and votes did not roll over to other candidates. This method (MMD-SNTV) is extremely rare, with few analogues in other countries.Footnote 4

Actual elections under the MMD-SNTV system proceeded as follows. Let us consider an electoral district with four seats. The Liberal Democratic Party (LDP)—the most popular party—would typically field two candidates, the Socialist Party (JSP) one candidate, the Democratic Socialist Party (DSP) one candidate, and the Japanese Communist Party (JCP) one candidate. That would make for five candidates competing for four seats. Keeping in mind that voters could only vote for one candidate, supporters of the JSP, DSP, and JCP—which only field one candidate each—would face an easy choice. But LDP supporters would have to pick between two candidates from their party.

The multi-member district system forced LDP candidates compete not only with rivals from other parties, but also with other LDP candidates. Given the LDP’s dominance, in a typical case, two LDP candidates, one JSP candidate, and one from either the DSP or the JCP would be elected. The average vote share for a winning candidate in a four-seat district was usually around 20%, meaning that a candidate could win a seat with the support of one-fifth of voters. Election results were usually in line with the nationwide distribution of party support.

As this example makes clear, the MMD-SNTV system has two important characteristics. The first is that candidates stand a reasonable chance of winning even as little as 20% of the vote, producing a result similar to proportional representation (PR) systems in terms of seat distribution among parties. In PR systems, power relations among parties are unlikely to fluctuate rapidly, barring dramatic changes in voter support. The second characteristic is that in order to build an independent majority in the legislature, a party needs to elect multiple winners in most constituencies.

In the case of postwar Japan, the LDP’s single-party dominance since the conservative unification of 1955 is attributed principally to the first characteristic. Because the proportional nature of the MMD-SNTV system inhibited significant fluctuations in seats, it was difficult for the opposition to dislodge the majority party and effect a change in government. At the same time, however, the LDP’s hold on power depended on electing multiple candidates from the same district. This complicated the internal politics of the LDP, as candidates needed to distinguish themselves from co-partisans to attract voters. In other words, competition between parties was converted into intra-party competition. Because LDP candidates belonged to the same party, the policy differences among them were small. Instead, they competed to provide benefits to local voters and supporters’ groups, leading to a segmentation of targets along regional and industrial lines. This invited political corruption by increasing the demand for political contributions for services and by giving birth to collusion between specific politicians and specific regions and industries.Footnote 5

The introduction of the mixed-member majoritarian system, which combined single-member districts with a proportional representation tier, was expected to change both characteristics. Under the district-based, first-past-the-post system, only one winner is elected from each constituency, and the share of votes needed to guarantee a win rises to 50%. It was thought that this method would make it easier to shift the balance of power among parties, while making it more difficult for candidates not affiliated with a major party to be elected. This would, in turn, give rise to a two-party system and more robust inter-party competition, increasing the likelihood of a change in ruling party. The addition of proportional representation to the new system was effectively a measure to mitigate the impact of this change: it would leave room for small parties that had secured seats during the era of the medium-sized electoral districts, preventing them from being suddenly extinguished.

In addition, candidates from the same party would no longer have to compete in the same constituency. The focus of competition was expected shift to differences between parties rather than within them, and be based on policy ideas rather than the distribution of benefits to local supporters. At the same time, it was thought that party executives would become the center of intra-party decision-making. Since it would be difficult to win a seat without belonging to a major party, the influence of party executives, who wielded power over electoral nominations, would grow substantially. The system would also reduce the need for political campaign funds, which had become necessary for the unproductive, policy-free battles over patronage. It was expected that the party subsidy system would further strengthen this trend by making the flow of political funds more party-centered.

2.2 Strengthening the Cabinet

The position of the prime minister was created in 1885, before the enactment of the Meiji Constitution. In the early days, the prime minister exercised power as a kind of “Great Chancellor” but this changed with the implementation of the cabinet government system (naikaku kansei) in 1889. Under this new system, the prime minister was considered “first among equals” in the cabinet. Each cabinet minister was responsible for managing the affairs of the ministry and agency under his jurisdiction and advised the emperor on an individual basis. This did not change even with the enactment of the current constitution after WWII. In other words, the principle of apportioned management (buntan-kanri gensoku), whereby each minister managed the affairs under his jurisdiction, was upheld, and the prime minister’s authority was constrained, as he did not even possess the right to make proposals in cabinet meetings. Of course, the intentions of the prime minister, who was the leader of the ruling party and had been directly appointed by the Diet, could not be completely ignored, and it should not be assumed that his actual influence was the same as before WWII. However, as long as the principle of apportioned management remained, the prime minister, even in policy areas of great importance, could only direct and supervise matters through ministers whose jurisdiction covered those issues. This was undoubtedly a major stumbling block to the exercise of leadership by the prime minister.

Other major constraints on the prime minister were his lack of autonomy over personnel affairs, including the distribution of cabinet posts, and his inability to draft cabinet legislation without prior consent from the ruling LDP. Two major characteristics of the LDP’s long period of dominance were that personnel matters, which had a major impact on the career paths of politicians, followed the wishes of internal factions rather the prime minister, who was the nominal leader of the party, and that policy planning was bottom up, starting from the LDP’s Policy Affairs Research Council (PARC: Seimu Chōsa-kai). For example, should a new agriculture policy be proposed, it would first be considered in the PARC’s agriculture and forestry subcommittee, where young Diet members with a deep interest in the agriculture sector (the agriculture “tribe” or “zoku”) and bureaucrats from the Ministry of Agriculture, Forestry, and Fisheries would cooperate to draft a bill. It would then be deliberated and approved by PARC and the General Council, bodies which are composed of many veteran lawmakers, and only then become the LDP’s official policy.

This process was established in the organizational management of the LDP during the 1960s and 1970s. During the high-speed growth era, when there was no realistic possibility of a transfer of power to a party other than the LDP, this system was suitable for distributing the fruits of economic growth while minimizing dissent within the party. It was also a system that left ample room for the involvement of politicians and bureaucrats with a strong interest in maintaining the status quo, making it difficult to introduce policies that would address new issues proactively. This custom was optimized for the LDP’s long tenure in government. Still, no significant changes were made internally when the party needed to share power, such as in the 1980s when it formed a coalition government with the New Liberal Club, or in the 1990s when the non-LDP coalition governments of the Hosokawa and Hata administrations were formed.

Electoral reform was expected to disrupt these practices by changing the internal organization of the LDP. In an electoral system centered on single-member districts, with subsidy system for parties, major-party legislators would have to follow the directives of party executives, such as the president or secretary general, since their chances of winning election would be poor if they were to leave the party. This is because the party executive would accumulate power over nominations—deciding whether a candidate would stand for that party—and over the distribution of political funds that are essential to compete successfully in elections. Changes in the management of intra-party organizations concerned with elections were expected to result in a top-down approach to policymaking and the use of personnel power.

Therefore, the purpose of strengthening the cabinet was threefold: to expand the institutional influence of the prime minister over cabinet ministers, to establish a chain of command and supervision over ministry bureaucrats and override the principle of apportioned management, and to encourage top-down policy decisions. With regard to the relationship between the prime minister and cabinet ministers, it became apparent in the immediate post-WWII period that the prime minister was no longer simply the “first among equals,” as seen by Yoshida Shigeru’s moniker as a “one man leader.” Ultimately, it was institutionally possible for the prime minister to dismiss cabinet ministers who did not obey his wishes, or for the prime minister to assume the position of a dismissed minister, which was done on several occasions during the postwar period. All that was left was to align the institutional system along with reality by giving the prime minister the power to make proposals in cabinet meetings.

Two remaining issues are more important. The principle of apportioned management was based on the Cabinet Act and the National Government Organization Act, but because the law only describes the division of labor among cabinet ministers and ministries, it did not address a key problem, namely that prime ministers could not directly address or intervene in policies that they deemed important. In the early postwar period, Yoshida Shigeru established Kantei (prime minister’s office) leadership through a reorganization of public administration, including reductions in the roles of the Headquarters for Economic Stabilization and the Central Liaison Office.Footnote 6 However, this was only possible under the unique circumstances of the postwar occupation period, and prime ministers after Yoshida could not repeat such measures.Footnote 7 Therefore, it became necessary to loosen the principle of apportioned management itself.

Furthermore, since the prime minister does not formulate detailed policies himself, this problem could be solved without a bureaucratic organization that directly advised the prime minister, separate from the ministries. Therefore, when ministries and agencies were reorganized in 2001, the Cabinet Office and posts for Ministers of State for Special Missions were created, and Cabinet Office bureaucrats were empowered to advance policies on designated matters as instructed by the prime minister. At the same time, the Cabinet Secretariat, which already existed, was made explicitly responsible in the Cabinet Act for policy planning and general coordination, facilitating top-down policymaking in accordance with the intentions of the chief cabinet secretary (in effect, the intentions of the prime minister).Footnote 8 An early example of legislation prepared using this process is the 2005 postal privatization bills.

Since then, the trend has continued for important legislation to be drafted not within the ministries and agencies, but closer to the prime minister in the Kantei. It is often pointed out that the Cabinet Office has become bloated and responsible for a large number of tasks, and the chief cabinet secretary has become more important than ever before. Institutional reforms that centralized power in the prime minister’s office continued to progress. The use of the Council on Economic and Fiscal Policy (CEFP) began in 2001 under the Koizumi administration, the National Strategy Unit concept in the DPJ administration from 2009, and the establishment of the National Security Council (NSC) and the National Security Secretariat (NSS) under the second Abe administration are all examples of this trend. The Cabinet Legislation Bureau (CLB), which can now reinterpret the constitution based on the intentions of the administration, is, in a broad sense, symptomatic of the same trend. Additionally, the will of the prime minister has been explicitly extended into the internal organization of each ministry and agency. The establishment of the Cabinet Personnel Bureau in 2014, which prevented ministries and agencies from appointing administrative vice ministers and other senior officials autonomously, is a concrete sign of this shift.

2.3 The Reorganization of Ministries and Agencies

The reorganization of central government ministries and agencies may have received the most attention among the administrative reforms that have taken place since the 1990s. This is because the names of long-familiar ministries like the Ministry of International Trade and Industry, and the Ministry of Home Affairs were changed, and several ministries were merged and received new names. On the one hand, these changes aroused gossipy interest in personnel matters such as the reduction in the number of administrative vice ministers and other senior bureaucrats. On the other hand, they also generated a wide range of reactions to the combinations and mergers, including both positive and negative feelings towards the new ministry names. This was the first large-scale reorganization of ministries and agencies since reforms in the immediate postwar period dismantled the Home Ministry and created the Ministry of Labor, and its value as a symbol of reform should not be underestimated.

However, the purpose of ministerial reorganization was to break down the stove-piped, overly-segmented structure of bureaucratic administration, which, as previously mentioned, was commonly recognized as an issue with the principle of apportioned management. Since the Meiji period when the modern bureaucracy was established, each ministry and agency recruited new civil servants individually. Although the National Personnel Authority (NPA) was established in the postwar period, it did nothing more than administer national civil service examinations, implement common training programs, and issue recommendations on salaries. The NPA did not adopt more centralized powers, such as recruiting bureaucrats or assigning them to ministries and agencies. The bureaucrats hired by the various ministries and agencies had a strong esprit de corps, or sense of belonging, and their pursuit of organizational interests—derisively referred to as “ministry interests over national interests” or “bureau interests over ministry interests”—became conspicuous. It was not uncommon for bureaucrats to form “iron triangles” (links between political, bureaucratic, and business actors) to defend vested interests through close relationships with related industries and with the policy tribe (zoku) politicians who ran the LDP’s Policy Affairs Research Council and its subcommittees.

In this sense, the reorganization of central government ministries and agencies was part of a broader set of reforms that strengthened the ruling party executive, bolstered cabinet functions and so strengthened the prime minister (and Kantei, the prime minister’s office). Together with the reorganization of ministries and agencies, there has been active mid-career recruitment of personnel with special expertise in various areas, separate from the recruitment of new graduates who have passed the national civil service examination (qualification-based appointments). In addition, there is more temporary recruitment of experts who are acquainted with the prime minister and other influential politicians (political appointments), and personnel exchanges between ministries and agencies have increased significantly. Although personnel exchanges are not new, they have increasingly taken forms that were not seen before, such as exchanges at the senior level (e.g., bureau chief) and open recruitment and transfer of bureaucrats to the Cabinet Office. The consolidation of several ministries and agencies can be seen as the most extreme form of personnel exchange.

No large-scale reorganization of ministries has occurred since 2001. This is partly because of the high costs required for ministerial organization, but an even greater reason is that reorganizing ministries and agencies is basically a framework-making process, or a means to change how bureaucrats act and formulate policy. In fact, even though the relationship between ministries, which is often criticized as being stove-piped, has not changed much, there is a clear tendency for the Cabinet Secretariat and the Cabinet Office to become the center of major policymaking. A typical example of this is the high-profile case of the establishment of a new veterinary school in 2017 (the so-called Kake Gakuen issue), in which the prime minister’s office overrode objections from the Ministry of Education, Culture, Sports, Science and Technology, which had long opposed the establishment of new veterinary schools.

3 Reforms Outside of the Central Government

3.1 Central Bank and Judiciary Reform

Central bank reform stands out among the political reforms introduced since the 1990s. The main reason is that the 1997 revision of the Bank of Japan Act—a specific outcome of reform—emerged in the wake of corruption scandals at the Ministry of Finance.

Prior to the 1980s, the Ministry of Finance (MOF) had supervisory authority over financial institutions, and through this authority was also responsible for financial regulation. In addition, under the Bank of Japan Act of the time, which was a continuation of wartime legislation, the MOF also exercised significant influence over monetary policy. Essentially, the fact that the Ministry of Finance, the administrative body responsible for public finance, was also responsible for financial regulation and monetary policy often led to a situation in which fiscal considerations were given higher priority than monetary policy, and this carried substantial latent risk.Footnote 9 This became apparent in various forms, including the difficulty in halting the expansion of the budget deficit from the 1970s to the early 1980s, scandals involving the wining and dining of Ministry of Finance bureaucrats by the financial industry from the late 1980s to the early 1990s, and loose financial regulation during the Bubble period. That career Ministry of Finance bureaucrats were entertained by the so-called “Gentlemen of the Bubble”—characters who were at the center of a maelstrom of shady financial flows during the Bubble period—and that this contributed to the instability in the financial system, including the non-performing loans problem, had the impact of raising societal awareness of this type of risk.

There is no doubt that the question of what kind of relationship is desirable between the central bank and the government—narrowly conceived as the legislative and executive branches—or put more simply, how much independence should be secured for the central bank, has been the subject of many international discussions and reform efforts. When the Ministry of Finance scandals made this a major policy issue in Japan, a central bank policy study group including outside experts was established at the Kantei in 1996. Based on its report, reforms were made to strengthen the Bank of Japan’s independence and bring it into conformity with international standards.Footnote 10 These changes can interpreted as a kind of decentralization, in the sense that they reduced the degree of government involvement in monetary policy. While changes in the central bank differ from other reforms in terms of their starting point, they essentially share the same direction and consequences.

By contrast, the most orthodox reform was that of the judiciary, although it occurred relatively late in the overall timeline of political reform. The starting point was the Judicial System Reform Council established in July 1999. The council’s chair was Satō Kōji, a constitutional law scholar. Satō was a key member of the Administrative Reform Council, which studied the basic policies for strengthening the cabinet and reorganizing central government ministries and agencies. The council’s final report emphasized the need for judicial system reform, and proposed a similar framework to that of the administrative reform undertaken by the Hashimoto government. In effect, electoral reform, administrative reform (strengthening the cabinet and reorganizing ministries and agencies), and judicial system reform were like three siblings serving to enhance the cabinet functions.

The goal of judicial system reform was to make the judiciary “closer to the people.” In this case, the “people” means not only the individuals who make up Japanese society, but also includes companies, organizations, and other corporate entities. The role of lawyers and courts (or extrajudicial proceedings involving lawyers) in resolving disputes was strengthened through an increase in the number of legal professionals—an outcome of the law school system and the new bar examination system—and by streamlining and rationalizing of the judicial process. Meanwhile, the introduction of the jury system was intended to increase opportunities for the general public to contribute to the legal process. This can be called modernization in that it encouraged Japanese society to become more litigious.Footnote 11 Following from the final report of the Judicial System Reform Council, a series of reforms based on this way of thinking were enacted during the Koizumi administration from 2002 to 2004.

3.2 Decentralization Reform

As mentioned previously, the first concrete result of political reform was the reform of the electoral system for the House of Representatives, which was prompted by the political scandals of the late 1980s—in particular the Recruit Scandal, which came to light in 1988 at the height of the Bubble period. Though the economy was unmistakably booming, many people were uncomfortable with the sharp increase in land prices and the growing atmosphere of “money worship.” The scandal was not of the classic type involving bribery in pursuit of a particular policy or profit. Rather, a businessman—the founder of Recruit—distributed unlisted shares of a group company to a substantial number of influential politicians. Given the economic trends at the time, it was almost certain that these shares would rise after the company went public, and there was little doubt about the illegality of these transfers. However, it was less the illegal activity that drew strong public criticism than the fact that politicians received special treatment from businessmen and had privileged access to profit-making opportunities. The term “sticky fingers” (in Japanese nurete ni awa, “picking foxtail millets with wet hands”), often used at the time, illustrates the nature of the criticism.

However, if we focus on the drafting of an explicit agreement by politicians to change the status quo, the direct starting point for political reform was in June 1993 when both houses of the Diet passed the “Resolution on the Promotion of Local Decentralization.”

The prerequisite for the passage of this resolution was the rise of the Japan New Party (Nihon Shintō) in the July 1992 House of Councillors elections. The party was created and led by Hosokawa Morihiro, who, just before the party was formed, published an article in the June 1992 issue of the monthly Bungei Shunjū called “Manifesto for the ‘Liberal Society Alliance’” and thus seized the leadership of debates.Footnote 12 Based on his experience as governor of Kumamoto prefecture, Hosokawa had focused on the deadlocked centralized nature of the state. He used the term “centralized bureaucratic system” to criticize two things: the central government’s concentration of power over local governments, and the power wielded by bureaucrats within the central government. The latter suggested the need to reform the central government, and the former the need for local decentralization reform. More than anger at political corruption, the recognition that the polity as a whole (to borrow a phrase from Hosokawa, “The System”) was the problem was a decisive driving force behind political reform.

Local decentralization was one of the central issues of political reform from the outset, and several major reforms had been attempted over the years. The Cabinet Office and the Ministry of Internal Affairs and Communications refer to the period from the Resolution on the Promotion of Local Decentralization in 1993 to the Omnibus Decentralization Act of 1999 as the first local decentralization reform. The period from the local government finance reform during the Koizumi administration—the so-called “Trinity Reforms”—and the 2006 submission of the “opinion on the promotion of local decentralization” by the six regional organizationsFootnote 13 until the present day is referred to as the second local decentralization reform. The first decentralization aimed to make the central government and local governments equal, and the second sought to further transfer administration and authority, and also to decentralize power within local governments (e.g., transferring authority from prefectures to municipalities). These reforms brought parity between the center and localities, while also promoting decentralization from prefectural governments to municipalities. This included, for example, the abolition of “agency-delegated functions (kikan-inin zimu),” whereby the central government delegated tasks to local governments, and the transfer of placement standards for public elementary and middle schools from prefectures to ordinance-designated cities (seirei-shitei toshi).

However, the distinction between the first and second stages of reform mentioned above fails to provide a complete picture of decentralization. When considering the relationship between central and local governments (intergovernmental relations), it is necessary to take into consideration not only political-administrative matters but also the financial aspect. Although the first decentralization promoted equality between central and local governments, local governments continued to count on the largesse of the central government to secure financial resources. The reforms aimed to change this situation by transferring financial resources to local governments, while at the same time making local governments more responsible for fiscal management. The “Trinity Reforms”—the transfer of financial resources and the reform of subsidies and local grants—were carried out in 2005. The Ministry of Internal Affairs and Communications opposed the Trinity Reforms, because of concerns that they would increase the autonomy of local governments without addressing the insufficiency of their financial resources. The six local organizations also did not clearly express their support. Today, the Trinity Reforms are not generally seen as a legitimate element of decentralization. However, it is fair to say that the substance of center-local relations was changed by the three waves of reform, particularly the first reform and the Trinity Reforms.

4 The Project of the Liberal Modernist

4.1 From “Object” to “Subject” of Politics

It should now be clear that the institutional changes in the various areas since the 1990s—which collectively can be called “political reform”—shared common perceptions and ideas.

Specifically, the reforms aimed for more active and extensive participation by independent, autonomous individuals in the various decision-making processes of Japan’s public sector. Put differently, the goal was to have the voters who make up Japanese society (the people) be responsible for creating and exercising political power, and for bearing the consequences of their actions. From the perspective of the politicians and bureaucrats who are actually responsible for exercising political power, this means that their power derives from the will of the people, that they are constantly monitored by the people, that they are held accountable if they exercise their power inappropriately, and that in some cases they can actually lose their positions as bearers of power. This idea can also be described as an attempt to align Japanese politics with the ideals of a modern society and the modern individual, and to operate the government (the state) based on this principle.

Behind this phenomenon was the recognition that in postwar Japanese politics prior to the reforms, individual citizens were not protagonists who constituted political power. Instead, the substance of political power was monopolized by the bureaucracy and the LDP, the perennial ruling party. This is not to say that Japan was elite-dominated in a simplistic way, since the LDP retained power democratically by winning elections, and elites were not a monolith and did not necessarily think alike. But it is true that the involvement of voters was limited. Muramatsu Michio, a public administration scholar, calls this “leadership by political-bureaucratic scrum,” because in pre-reform Japanese politics, the state was managed by “close cooperation between politicians (ruling party) and bureaucrats”Footnote 14

Electoral and cabinet reforms were positioned as a series of changes that would transform the people into an entity that exercise its power through its choice of government and that could safely entrust the management of the state to achieve the targets of their choosing. The reorganization of central government ministries was a means to this end: it aimed to reduce the autonomy of the bureaucracy vis-à-vis the government and constrain its ability to exercise influence without the government’s instructions. The reduction of the bureaucracy’s influence was a concept that was also visible in central bank reform. Local decentralization reform also had a common element, in that it entrusted more decision-making authority and resources to local governments, which as units of governance were closer to the people and more accessible to their control. The reform of the judicial system, which sought to bring the judiciary closer to the people by increasing the number of legal professionals, and which introduced the lay judge system to promote the direct participation of the people in judicial activities, suited this plan perfectly.

The premise was the recognition that pre-reform Japanese politics—and even Japanese society broadly—lacked a concept of governance based on the independent and active choices of autonomous individuals. Despite the postwar liberal democratic system that was brought about by the Occupation reforms, the public remained predisposed to depend on its “superiors” (okami, “those above”), that is, an attitude of kanson minpi, and it was broadly thought that the country was not sufficiently capable of the self-government truly necessary for democracy. This understanding was fostered by the fact that political power had always been in the hands of the same actors, given that there were no changes of government over a long period and robust inter-party competition for political power was lacking. When considering the role that such perceptions played in the process of political reform, the fact that these ideas were widely accepted is more pertinent than whether they were correct understandings of the status quo.

Let me quote the introduction of the final report of the Administrative Reform Council submitted in December 1997, as the most straightforward statement of this belief.Footnote 15

Administrative reform is a reform of the “administration,” and it is also a reform of “the way of this nation” itself, as the people, who under the Meiji constitution had become accustomed to being the object of government rule, were prone to dependence on the bureaucracy even during the postwar period. That is to say, it is concerned with how “we the people” comport ourselves. The goal of this administrative reform is to recall and refine the positive aspects of the traditional characteristics of “We Japanese”, and, in the spirit of the Constitution of Japan, reconstruct the “shape of this nation.”

Political reforms aimed to rid the people of the condition of being “the object of government rule” and instead to “reconstruct ‘the shape of this nation’…in the spirit of the Constitution of Japan.” This could not be achieved solely by reforming the administrative sector. It is in this sense that the report states that the reforms were not limited to “administration.” This passage can be even viewed as a manifesto for the entirety of the political reforms that are the subject of this book.

4.2 Modernism in Postwar Japan

This way of thinking is not unique to the final report of the Administrative Reform Council or even political reform since the 1990s. Rather, it has its origins in a principle widely seen in postwar Japan: “modernism” (kindai-shugi).

Modernism refers to the idea that it is desirable to “modernize” Japan’s political, economic, and social systems and the way that individuals live in them. Modernization means that people’s behavior and the organizing principles of society should be free from baseless prejudices, customs, and blind obedience and faith in supposed authority and should be based rather on individual, autonomous decisions and be rational with respect to their purposes. The term “modernism,” in this sense, originated in the Communist Party’s criticism of people who, in the early postwar period, gathered around the journal Modern Literature (Kindai Bungaku). The journal’s contributors wished to modernize Japanese culture and thought, but in the Communists’ view they failed to pay sufficient attention to power structures and material foundations.Footnote 16 The term later lost its initial critical sense, and came to refer to a philosophy that promoted the rationalization of the thoughts and actions of Japanese society and individuals. Modernism as referred to in this book reflects this type of thinking.

The background for the increased presence of modernism in postwar Japan lies in the experience of the pre-WWII and wartime periods. Through the opening of the country during the Bakumatsu period and the Meiji Restoration, and the subsequent establishment of a new political regime, Japan adopted the same governmental and social systems as Europe and the United States. However, it became apparent in Japanese society during the prewar and wartime periods that these had been accepted in form but not in substance, or that they were nothing more than abstract ideals. In other words, there is a difference between modernizing institutions (institutional modernization) and modernizing the way that real people think and behave (spiritual modernization), and only when both are brought into conformity will Japan truly be modernized. It should be said that this way of thinking spread rapidly with the country’s defeat in World War II and with the subsequent transformation of its constitutional system, which set forth Japan’s independent values.

Although the idea of modernism spotlights the divergence between institutions and the spirit, it does not mean that the creation or transformation of institutions alone is ineffective. Rather, the opposite is true: institutional modernization is assumed to be an important starting point or companion for spiritual modernization. This is because institutions provide the trigger for rationalizing individual thought and action. Therefore, modernists would generally rate institutional modernization positively, regarding the formation of the Meiji constitutional system as the first step towards spiritual modernization. It is in this sense that the final report of the Administrative Reform Council cited previously refers to “the spirit of the Constitution of Japan.” However, many commentators also believe that despite the fact of institutional modernization after WWII, these reforms were not implemented thoroughly. This suggests that further institutional modernization and operational changes are needed.

After World War II, modernists appeared at the center of Japan’s discursive space. Perhaps it would be more accurate to say that they regained their mainstream status after being liberated from the repression of anti-Western thoughts and beliefs during the prewar and wartime periods. Modernism was an idea that could offer a frontal critique of the military clique and right-wing political leaders who—because they threw their weight around or indulged in paranoid self-delusions without knowing their limitations—committed foreign policy errors that caused enormous human and material damage and untold tragedy and suffering. It also offered a response to those who followed orders blindly and inflicted authoritarian oppression on local communities and workplaces. The basic perception was that despite efforts at modernization since the opening of Japan in the nineteenth century, many parts of Japan’s politics, economy, and society were premodern and “backward.” Put differently, a common belief was that the individuals living under these conditions had not become autonomous human beings worthy of modern society, and that their ideas and actions lacked rationality. There are countless variations of this view, with nuances that differ from period to period, but they are not new arguments per se. Modernism had widely penetrated postwar Japan.Footnote 17

4.3 Liberalism, Communism, Conservatism

The fact that modernism in postwar Japan was founded on strong criticism of the prewar and wartime periods may have bred biases towards political reform.

As noted previously, modernism is essentially the idea that it is desirable to make Japan’s political, economic, and social systems more rational, and to do the same with the thoughts and actions of individuals in these systems, thereby bringing them into line with the “West,” or at least an idealized conception thereof. The Western countries that people looked to were the United States, the United Kingdom, France, and Germany, which after World War II were seen as analogues or ideal types of “the West,” or of Western industrialized countries. Germany, which had been partitioned after WWII, had lost status as a typical Western industrialized country, due to the destruction it incurred during the war, exhaustion from its defeat, and its responsibility for having produced the Nazis. However, for Japan, Germany had been a model country since the Meiji period, and its prewar influences, on the legal and medical systems, for example, remained. West Germany’s postwar reconstruction also proceeded at a faster pace than Japan’s, and the country was also ahead of Japan in terms of the stability of its party politics and its construction of a welfare state. Therefore, West Germany basically maintained its status as a model country for Japan, if not to the same extent as before the war.

These Western countries adopted liberalism and democracy in politics, and capitalism in economics. Both liberalism and capitalism encourage individuals to think and act freely, and espouse the principle that economic activity and policy decisions should be based on these individuals’ intentions. Democracy, by treating the individuals who make up society equally and allowing them to participate in the political process, became integrated with liberalism and capitalism after World War II. If postwar Japan’s modernism is modeled on the Western industrialized countries that championed these principles, then it would seem logical to embrace liberalism and capitalism. Although the relationship between liberalism and capitalism can be organized in various ways, the understanding that ideological liberalism was most important and that capitalism was its economic expression had become standard in the mid-twentieth century. Accordingly, this book will simply refer to these principles as “liberalism” (jiyū-shugi).

However, modernism in postwar Japan had a stronger affinity with leftism—including communism—than with liberalism, for two major reasons. First, during the prewar to wartime period, some left-wing Marxist forces had resisted the rise of fascism and militarism until the very end, thus ensuring their intellectual legitimacy. Of course, more than a few Marxists were suppressed, converted, or forced into silence. But some Communist Party and social-movement leaders refused to abandon their ideology despite torture and imprisonment. At the same time, Marxism’s ability to justify the role of the state and government—even while calling these things “transitional forms”—made it rather compatible with the wartime economy, thereby helping its core ideas survive the war years surprisingly easily.Footnote 18 Second, Marxist theory was an important part of modern thought in the sense that it sought to liberate individuals from irrational traditions and customs and to manage the socioeconomy rationally. In this sense, it was the most comprehensive and systematic social theory in prewar Japan.Footnote 19 At that time, Marxism was the “general sales agent” for Western modernity and served as a synonym for modernism.

Postwar modernism inherited these conditions. Its ideological position, which would normally be called the “left” or “heretical” wing of modernism, came to embody postwar Japanese modernism as a whole. There had been, to be sure, a more standard, liberal-oriented modernism in the pre-war period—dare I say a “modernist right wing.” Thinkers beginning with Kawai Eijirō of the economics faculty of the Imperial University of Tokyo (Todai, or Tokyo-teidai) clearly held such a position, and were aware of tension between their views and those of the left.Footnote 20 Minobe Tatsukichi also belonged to this lineage, along with other thinkers who emphasized a liberal interpretation of the Meiji Constitution. However, Kawai and others left Todai as a result of internal conflicts, while Minobe and others faced repression that forced them out of academia. Liberals were not in a position to completely reject the prewar system, and unlike Marxists—who had an affinity for command economies and state control of various resources—they were not only marginalized during the war, but remained a minority among supporters of modernism in postwar Japan.

As sociologist Oguma Eiji points out, prewar liberals were treated as “old liberalists” after the war, and did not have a good relationship with postwar modernists.Footnote 21 The old liberalists were people whose view of political economy was that liberalism (modernism) was achievable within the framework of the Meiji constitutional system. In terms of foreign policy, they almost perfectly overlapped with the pro-Anglo-American faction in the prewar period. In addition to the previously mentioned Minobe Tatsukichi, these thinkers include Abe Yoshishige, Watsuji Tetsurō, and Koizumi Shinzō. In the early postwar period, they were involved in editing the magazine Sekai, which was newly launched by Iwanami Shoten and had major intellectual influence. Other figures, such as Tanaka Kōtarō and Amano Teiyū, were directly involved in the construction of the postwar constitutional system as Supreme Court justices and cabinet ministers. However, their influence declined as a new generation of liberalists claimed that a modernism that maintained the Meiji constitutional system, or “emperor system,” was fundamentally inadequate, and that pro-Anglo-Americanism was simply anticommunism. This was another major reason why modernism in postwar Japan became centered on the left.

Still, considering the intellectual currents of postwar Japan, it should not be forgotten that there were not only left and “right” (liberal) modernisms, but also a conservative version. Conservatism here refers to the attitude of idealizing Japan under the Meiji constitutional system, including the prewar and wartime era. Of course, since the Meiji Constitution was itself a product of modernization and reflected the ideals of modernism, the explanation that conservatism idealized the prewar period may sound strange. Postwar Japanese conservatism has the striking feature of being unclear about “what to protect and what to return to.” However, it is unreasonable to think that under the Meiji Constitution Japan was completely modernized or even united in its conception of modernism. Instead, institutional modernization proceeded on a social foundation inherited from the premodern period. In that case, conservatism is the position that seeks to maintain the social foundation or ethos inherited from the pre-modern era, based on the recognition that it is endangered by institutional modernization. Thus, instead of making the divergence between institutional modernization and spiritual modernization an issue, conservatism took a negative stance towards spiritual modernization and emphasized pre-modern-era social order and familial and communal ties over individual autonomy.

4.4 The Relationship with Party Politics

The three major intellectual currents in postwar Japan—the modernist left (Marxism), the modernist right (liberalism), and conservatism—were also closely linked with party politics. The following provides a broad overview.

In the party politics of postwar Japan, the period from the immediate aftermath of defeat until 1955 generally featured a three-way struggle.Footnote 22 Although the names changed frequently, the three sides comprised the Liberal Party of Yoshida Shigeru and Ogata Taketora, the Democratic Party (Progressive Party), which included Shigemitsu Mamoru and others (later joined by Kishi Nobusuke), and the Socialist Party of Katayama Tetsu, Nishio Suehiro, among others. All had links to prewar parties: the Liberal Party had its origins in the Seiyūkai and the lawmakers who remained outside of the Imperial Rule Assistance Association (IRAA: Taisei Yokusan-kai) during the war; the Democratic Party had deep links with the Minseitō and IRAA lawmakers; and the Socialist Party was the successor of the Social Mass Party. However, because of the purge of many prewar elites from public office, coupled with the messy state of the political system in the immediate postwar period, one should not directly link prewar and postwar political parties. For example, although Kishi belonged to the Democratic Party at the time of the conservative merger in 1955, he had been a member of the Liberal Party when elected to the House of Representatives for the first time after the war. In addition, the Japanese Communist Party’s existence could not be ignored even though it advocated violent revolution and secured virtually no power in the Diet.

Of the parties, the modernist left had a natural affinity with the Socialist Party and other reformist forces. By “reform,” these forces meant changing the prewar social order in a progressive way. The connection to modernism is obvious. In terms of personnel, too, the Socialist Party initially had a strong left-wing modernist color, with politicians such as Wada Hiro-o and Katsumata Seiichi, who had been progressive bureaucrats before and during the war. The liberal, or right-wing modernist faction was strongly linked with the Liberal Party, especially after Yoshida Shigeru recruited a large number of bureaucrats including Ikeda Hayato and Satō Eisaku into the party and made them Diet members. For prewar elites from the bureaucracy, modernization had been a priority since the opening of the country in the mid-nineteenth century, and their greatest concern was to actualize it in the postwar international environment. Conservatism was mostly at odds with the Liberal Party, which was increasingly on the modernist right, and most aligned with the Democratic Party, the Liberal Party’s rival that had inherited political traditions from the prewar Imperial Diet.

The conservative merger of the Liberal Party and Democratic Party in 1955, which formed the Liberal Democratic Party, meant that liberal modernism and conservatism had joined forces. The conflict between the two groups continued within the LDP for a long time, taking the form of inter-factional and personal rivalries between ex-bureaucrats’ and career politicians.

Furthermore, if one looks at the modernist right as the equivalent of liberalism, the same merger of liberalism and conservatism in one party occurred in many countries after WWII, including the United Kingdom, with the decline of the Liberal Party, and West Germany, with the formation of the Christian Democratic/Christian Social Union. That said, one way Japan differed from the Western European countries was the crucial role of modernism. In the West, social democracy occupied an ideological position corresponding to that of the modernist left in postwar Japan. However, social democracy is not Marxist; instead, it pursues the construction of a welfare state and advocates redistributive policies, starting with the expansion of social security, within the framework of liberalism and capitalism. In the case of Japan, the overlap between the modernist left and Marxism was so great that social democrats split between the right wing of the Socialist Party and the Democratic Socialist Party, and were limited to the role of a minority faction in party politics as a whole.

Recently, some commentators and scholars have argued that the LDP has become steadily more conservative since the 1980s.Footnote 23 They point to the Nakasone administration, which took office in 1982, as the origin of this development. Politicians who stressed the Meiji constitutional system and its values came to occupy the center of the LDP, and intellectuals who shared similar ideas were appointed to important posts. When compared with preceding administrations, such as that of Prime Ministers Satō and Miki, it is not untrue that such tendencies were present during the Nakasone administration.

However, Nakasone himself was an old friend of Watanabe Tsuneo, who, as a political reporter for the Yomiuri Shimbun, had long pursued a pro-U.S., anti-communist line. Meanwhile, during his tenure as prime minister, he appointed Katō Hiroshi, known as a neoliberal economist, to the board of the Second Provisional Administrative Research Commission (the so-called Second Rinchō). As such, Nakasone’s conservatism was not based entirely on confrontation with the left wing. Moreover, after his departure, the LDP leadership included politicians like Miyazawa Kiichi and Katō Kōichi, who came from bureaucratic backgrounds and did not favor reactionary policies; Hashimoto Ryūtarō, who was strongly interested in administrative rationalization; Nonaka Hiromu and Koga Makoto, who were skeptical about strengthening defense capabilities due to their experiences in WWII; and even politicians like Koizumi Jun-ichirō, who had little interest in the prewar period. In particular, Hashimoto, Katō, and others played a major role in the process of political reform that is the subject of this book. Under the Second Abe Administration beginning in 2012, conservatism appears to have gained strength, but the lineage of the liberal modernist in the LDP has not been broken, and drawing a direct link from the Nakasone to the Second Abe Administrations is clearly impossible.

4.5 Who Is the Liberal Modernist?

Finally, let us discuss the proponents of modernism in postwar Japan. In the early postwar period, intellectual elites educated in the prewar period led the discussion. As mentioned previously, when, for example, Iwanami Shoten launched Sekai in 1946, old liberalists like Abe Yoshishige were at the center of the movement. Old liberalists, in other words, prewar liberals, were clearly the originators of the liberal modernist.

However, these figures withdrew after a short time, and new proponents of modernism arose to replace them, such as Maruyama Masao, Ōtsuka Hisao, Kawashima Takeyoshi, and Shimizu Ikutarō. Of these, Maruyama was the most important figure, as he articulated arguments for a comprehensive peace treaty involving the Soviet Union and other communist countries, along with his opposition to the U.S.-Japan Security Treaty.Footnote 24 Although Maruyama was not a Marxist, he likely thought that the rise of the left was necessary for the modernization of postwar Japan, from the standpoint of thoroughly confronting the Meiji constitutional system. This is where the dominance of the left in modernism from the 1950s until the early 1960s was established. By contrast, the liberal-oriented modernist right was led by Kimura Takeyasu and Inoki Masamichi, who had been trained by Kawai Eijirō, but in the context of the Cold War, they did not necessarily emphasize their modernism more than their anticommunism. It is undeniable that, with the LDP and the Socialist Party (and the Communist Party) locked in partisan conflict, there was a tendency for all conservatives to be lumped together.

The situation began to change in the mid-1960s when, buoyed by high-speed economic growth, the LDP administration stabilized and the conflict between liberalism and communism, or between the LDP and the JSP/JCP, began to lose its practical significance. In the February 1964 issue of Chūō Kōron, Kōsaka Masataka’s “On Prime Minister Yoshida Shigeru” was published. Kōsaka, an international relations scholar (whose father was Kyoto School philosopher Kōsaka Masaaki) had studied under Inoki Masamichi and Taoka Ryōichi. The previous year he had published “The Realist’s Theory of Peace,” also in Chūō Kōron, which attracted attention for its criticism of the idealistic view of international politics that underlay the argument for a comprehensive peace treaty. Kōsaka had given high praise to Yoshida Shigeru, who had generally been regarded negatively for his political elitism and his views on military rearmament, for his role in laying the cornerstone for postwar Japan’s foreign policy. The young Kōsaka, following American theoretical trends, had been conducting research on international politics using examples from nineteenth-century Europe and U.S. policy towards China during the interwar period. It was editor Kasuya Kazuki who encouraged him to contribute to Chūō Kōron.

Around Kasuya gathered not only Kōsaka, but other up-and-coming public intellectuals like Yamazaki Masakazu and Nagai Yōnosuke. As regular contributors, they gathered frequently at Chūō Kōron’s headquarters to freely exchange ideas in what was known as the “Chūkō Salon.”Footnote 25 Kōsaka, Yamazaki, and Nagai all had one thing in common in their personal histories: they had graduated from university after the war and spent the first half of the 1960s studying abroad at prestigious universities in the eastern United States. This was in contrast to the leaders of the modernist left in the 1950s, who had begun their research careers before the war and were shaped mainly by European intellectual influences.

The younger intellectuals saw great significance in modernizing or rationalizing politics and policies, socioeconomic conditions, and individual lifestyles, based on the promise of postwar Japan’s liberal democracy and international order. In other words, they fundamentally affirmed the new constitutional system, which respected the individual, as well as the U.S.-Japan alliance, which was committed to liberalism, and they stressed the importance of expanding Japan’s prosperity based on this foundation. This was different to both the old liberalists, whose starting point was the Meiji constitutional system, and the modernist left, who did not stress liberalism. It is not farfetched to see here the establishment of the modernist right—a modernism based on liberalism—in postwar Japan. In personal terms, Kōsaka, who was acquainted with Yoshida Shigeru from early on, contributed with Yamazaki and others to policy planning, including negotiations over the reversion of Okinawa during the Satō Administration, under Kusuda Minoru, the prime minister’s secretary in the late 1960s.Footnote 26

In the so-called Ōhira Study Group, organized by Ōhira Masayoshi, who was prime minister in the late 1970s, liberal modernists and conservative thinkers like Kōyama Ken-ichi and Satō Seizaburō became co-mingled. On this point, political scientist Uno Shigeki notes that the Ōhira Study Group featured co-existence between “community- and civil society-oriented conservatism” and “statist conservatism.”Footnote 27 In the classification scheme used in this book, the former would generally be described as liberal modernism and the latter as conservatism. Meetings appear to have been held from the end of the Satō administration in which both jointly discussed policies, with the involvement of the Cabinet Research Office (the Cabinet Intelligence and Research Office from 1986 onward).Footnote 28

However, Nakasone, when he became prime minister in 1982, tapped what one might call conservative thinkers for important posts. After the first half of the Nakasone administration in the 1980s, Kōsaka, Yamazaki, and Nagai largely retired from involvement in policymaking.Footnote 29 Nakasone, who came from the bureaucracy but was close to people from the Democratic Party’s grassroots politicians wing, may have wanted to weaken his dependence on the modernist right, which had existed with the Liberal Party’s bureaucrat wing, beginning with Yoshida Shigeru and continuing through Ikeda, Satō, Ōhira, and Miyazawa. Therefore, the co-mingling seen in the late Satō administration and the Ōhira Study Group did not carry over into the 1980s, thus severing the personal ties to liberal modernists in terms of its involvement in the policymaking process and its advisory role to the government of the day. Also during this period, the influence and attractiveness of communist countries, especially the Soviet Union, declined, and the Cold War axis of confrontation over foreign and security policy, such as pro-Americanism and anticommunism, lost a great deal of real meaning.

As a result, after the Nakasone administration, leadership of the liberal modernist passed to the next generation, which became the intellectual driving force behind political reform. Political reform was a project of the liberal modernist, but at its center were business leaders with rich experience overseas, such as Ushio Jirō and Kobayashi Yotarō. There were certainly other figures like Sasaki Takeshi, a political scientist who contributed to many reforms after electoral reform, and Satō Kōji, a constitutional scholar who played a major role in strengthening the cabinet and reforming the judicial system. However, the presence of academics in the reforms of the 1990s had declined greatly when compared with, for example, the many members of the Satō administration’s brain trust who were affiliated with universities. It is no exaggeration to say that in the process of various reforms, beginning with that of the electoral system, the main source of ideas had become economic organizations like the Keizai Dōyūkai and the Japan Productivity Center (Nihon Seisansei Honbu), as well as the Social and Economic Congress of Japan (Shakai Kaizai Kokumin Kaigi), which was based on those groups. This will be discussed in more detail in later chapters, but one of the driving forces behind the political reforms that followed the end of the Cold War was the recognition of structural changes in the international political economy, such as the worsening of economic friction between Japan and the United States in the 1980s.

4.6 The Localization of Reforms and the Rise of Domain Autonomy

Even if political reform can be categorized as a project of liberal modernism, it would be somewhat unreasonable to imagine that a single idea directly dictated various reforms extending across a wide range of domains. As mentioned in the Chap. 1, even when there is an idea that runs through the whole, when reform proposals for individual areas are introduced, it is necessary for the ideas to be localized so that they will be accepted by the main actors in each domain and their results will take root. Localization refers to the embodiment of reform ideas as measures that address issues previously recognized in the given area, or possible policies that are acceptable to actors with strong interests in the domain. This process makes possible the formation of a majority necessary for the promotion of reform.

The basic idea of modernism is to make Japan’s public sector and socioeconomy more modern and rational. The fact that such an idea gained the support of many actors in different individual areas of reform suggests that the relevant actors recognized the problematic prevalence of some pre-modern or irrational elements. What exactly were these elements? We will leave the details to the narratives in each chapter, but here we will introduce and simply provide a general overview of the main areas of reform.

The first irrational element in the central government is the strong status quo bias of the majority of politicians in the ruling Liberal Democratic Party, as well as the bureaucrats that cooperate with them. Long-term single-party dominance, the economic growth that occurred under it, and the existence of the Cold War international environment, all sapped the ability of the LDP and the bureaucracy to generate a long-term vision for Japan as a nation. Instead, it was in their greater immediate interest to dedicate their efforts to the politics of short-term patronage.

While this pro-status quo orientation was not necessarily irrational from the start, changes in the international environment since the late 1980s, such as the intensification of economic friction between the U.S. and Japan and the end of the Cold War, as well as changes in the socioeconomic environment after the bursting of the bubble, made these practices less rational. It is not that it was objectively difficult to continue on the same path. Rather, a growing number of people—legislators of the main political parties, bureaucrats, the business community, organized labor, the mass media, and academic circles covering the public sector and socioeconomics—came to share the recognition that reform was necessary. It was impossible for individual legislators and ministries to quickly articulate policies that were appropriate for the new environment if they only represented the narrow interests of their supporters or the industries with which they were associated. Instead, political leaders, who were entrusted with a clear mandate from the electorate, were expected to articulate macro-level directions from a broader, more comprehensive perspective and then translate them into individual policies through strong leadership. Based on this recognition, electoral and cabinet reforms were aimed at improving the ability to respond rationally to new challenges through the empowerment of the central government.

Was this also the case for local governments and the Bank of Japan? Here, too, the underlying recognition was the need to improve the capacity to respond rationally. However, these measures differed from the case of the central government. It was thought that improving the capacity to respond to challenges head-on could be achieved by eliminating intervention and control from the central government as much as possible, thereby allowing local governments and the Bank of Japan to properly fulfill their expected roles. The view was that if bureaucratic control over local governments and the Bank of Japan were eliminated, and these institutions could develop policies based on their own judgment, they would be able to break away from the status quo bias imposed by the central government. This view had already filtered widely into various areas. As a result, unlike the case of central government reform, which aimed to enhance responsiveness while also centralizing power, the aim was to increase autonomy (independence) from the national government via decentralization. Of course, in practice it was unknown whether local governments and the Bank of Japan would be able to break free of an irrational status quo bias if they were to increase their autonomy, but it was clear that many theorists and concerned parties were advocating such an approach.

Judicial reform, as mentioned previously, is a change in the structure of central government that is on par with electoral and administrative reforms. There is no doubt that its purpose was to rationalize the political system and improve its capacity to respond to the new socioeconomic environment. However, the specific measure chosen, as with decentralization and Bank of Japan reforms, was to strengthen autonomy from the politics and administration of the central government. Three major insights about the present and future of the judiciary likely lay behind this goal. The first was that the judiciary had been too sensitive to the will of the LDP and the bureaucracy, and that its capacity to respond to socioeconomic issues had been too limited. The second was that simply increasing the autonomy, or independence, of the judiciary was not sufficient to improve its capacity to respond; it was necessary to strengthen its ties with society (citizens). The lay judge system and the law school system were institutional expressions of this recognition.

The third was confidence in centralized control within the judicial branch (the courts). While the independence of the judiciary was being strengthened, there was also a great fear that the judiciary would become “amateurish” if the number of legal professionals expanded and lay judges were brought into the judicial process. The judiciary, as a branch that is not publicly elected, ensures its raison d'être through its expertise. It is necessary to construct a mutually consistent, nuanced theory of legal interpretation and to apply it accurately and stably in specific lawsuits so that citizens will feel secure in entrusting the resolution of judicial conflicts to experts. In order to maintain this sense of security while improving the capacity to respond, the supremacy of experts within the judicial branch would have to be ensured. The key to localization in judicial reform resides in this point.

The fact that these localization efforts took place under various, domain-specific circumstances contributed to the breadth of political reforms, as well as to differences in their specific directions.