1 Far-Reaching and Large-Scale Reforms

1.1 Consistency in Ideas

So far in this book, we have examined political reforms undertaken since the 1990s, focusing on their processes and consequences. The fact that reforms were carried out in rapid succession in most areas of the public sector, and included electoral reform, administrative reform, reform of the Bank of Japan and the Ministry of Finance, judicial reform, and decentralization, means that this period should be considered a major epoch in Japanese political history. It is not uncommon for the period during which political reform occurred to be demeaned as the “lost two decades” or the “lost three decades,” because of the economic malaise that Japan has experienced since the bursting of the Bubble. However, at least with regard to the public sector as defined by the Constitution—the constitutional system—this was a period in which the government demonstrated an extremely high capacity to reform itself. It could even be said that the reforms created a third constitutional system, following both the original Meiji constitutional system, which established the basic structure of the modern state, and the postwar reform period, which saw a fundamental shift in the principles of the state’s legitimacy including the adoption of popular sovereignty.

The Constitution of Japan, enacted at the time of the postwar reforms, is said to have low “regulatory density” in the sense that it does not contain many specific details about the structure of governance. For this reason, the text of the Japanese Constitution was not revised during the political reforms of the 1990s and thereafter.Footnote 1 However, it is not uncommon in political science to describe the various rules that create and facilitate political power (governing rules) as the de facto “material constitution,” even if they are not explicitly enumerated in the written constitution’s text. When viewed in this way, the political reforms covered in this book are “constitutional reforms” in the material sense, to use the words of constitutional scholars Ōishi Makoto and Shishido Jōji.Footnote 2 Reforms of the constitutional system that do not entail revisions of the codified constitutional text are not exceptional, as seen in the United States during the New Deal era.Footnote 3

What was the thinking underlying major reforms to the governing rules or, put differently, revisions of the material constitution? This was one of the central issues I sought to clarify in this book. As we saw in Chap. 1, one strand of the literature has argued that there was no consistent rationale and that all that existed was uninformed enthusiasm. The argument that “populism” was born after the Koizumi administration because of political reforms may be an extension of this “fever theory.”Footnote 4 A diametrically opposed view is that reform proceeded in many areas for the purpose of producing specific outcomes, such as neoliberal economic policies. However, both arguments are inconsistent with many of the actual reform processes and outcomes. This book’s analysis is closer to that of the “Heisei Democracy” viewpoint that has been proposed in recent years, which lies somewhere in between the two.

1.2 What Underpinned Heisei Democracy

The Heisei Democracy theory points out that there was a common recognition of the historical context and priorities in each area of political reform, particularly electoral and administrative reforms. More specifically, there was an understanding that reform was necessary because the economic prosperity and social stability of postwar Japan, which had reached its peak in the 1980s, was now threatened by Japan’s very success. The intensification of Japan-U.S. economic friction and the end of the Cold War had significantly reduced the effectiveness of the basic model of Japanese politics that had prevailed until then, which included the policy line of “light armament and an emphasis on the economy, based on the U.S.-Japan alliance” which was adopted for almost the entire postwar period; long-term LDP dominance as the bearer of this policy line; and internally pluralistic but exclusive and intimate cooperative relationships among the LDP, the bureaucracy, and related industries. As urban voters and leaders of some economic and labor organizations began to realize the system’s limitations, they sought to create a public sector that was responsive to new domestic and international environmental conditions and this attracted the support of academics and journalists critical of the corruption generated by the LDP administration.

Specifically, what they sought was an electoral system that would produce policy-based party competition and changes in government, as well as a bureaucracy and judicial branch capable of tackling new policy issues and solving problems without being captive to precedent or prevailing ways of thinking. It is important to note that the improved responsiveness of the post-reform public sector to new environmental conditions does not necessarily mean that certain policies, such as the neoliberal line, are more likely to be adopted. Political scientist Hiwatari Nobuhiro has shown through multinational comparison that electoral systems based on single-member districts are not necessarily linked to neoliberalism.Footnote 5 In fact, as represented by the “Third Way” of the 1990s, there was a worldwide movement to realize an alternative to neoliberalism through changes of government, and in the case of Japan, the change of government in 2009 had such a meaning. Depending on one’s position, the LDP and Komeito’s return to power in 2012 may similarly be regarded as a change in policy line.

In addition, this book emphasizes an even more fundamental foundation for political reform than those covered by Heisei Democracy theory, namely, the concept of modernism. Modernism, as used here, is the idea that it is desirable for the individuals who make up Japanese society to become more autonomous, to take responsibility for their own actions and make rational judgments about the matters in which they are involved, and that through the accumulation of such actions, the decision-making and standard operating procedures in Japanese society will be rationalized.

In the ideological space of postwar Japan, the agents of modernism were predominantly the left wing. Because the LDP has consistently been pre-modern in character since its antecedent conservative parties, the leftist position is that modernism can only be pushed ahead if parties other than the LDP—meaning, in the leftist view, the Socialist Party or the Japanese Communist Party—assume political power and replace the conventional order with a Marxist system. There was also a minority of thinkers who took the position that rational elements also existed within the LDP, and that if these elements could be used, the aims of modernism aimed could be achieved without a left-wing government. In this book, this position is referred to as liberal modernism. The philosophy of liberal modernism, which aimed at rationalization through institutional change within the system, provided the basis of political reform.

By introducing the ideas of liberal modernism, we can understand for the first time why the political reforms of the 1990s were so extensive and continuous, and why they were accepted even by the ruling elite, including LDP politicians and central government bureaucrats. It is precisely because these actors had been responsible for Japan’s successes up to the 1980s, and at the same time had faced the brunt of tough international negotiations, that they knew from personal experience that there was room for modernization and rationalization in Japan’s public sector and socioeconomy. In this sense, political reform not only aimed to respond to the new environment after the end of the Cold War, but was a more active attempt at self-improvement to rationalize Japan’s public sector and socioeconomy more broadly. While the Meiji and postwar changes to the material constitution shared the same goal of responding to the international environment, if we consider how the 1990s reforms were driven by the government’s own will without external pressure, they arguably have elements that surpassed the former two initiatives to establish a new constitutional system.

The actual changes that have resulted from political reform should not be underestimated. The impact of institutional change can be seen in each of the domains, as demonstrated in this book, and there are many areas where institutional change has produced the anticipated effects. The expressions “lost two decades” or “lost three decades,” in the sense of wasted time, does not apply to politics. The most representative change is the increased policymaking power of the prime minister and a small group of top leaders around him, i.e., Kantei leadership. Never before in postwar Japanese politics have the prime minister’s name and intentions been so closely linked to policy decisions as they are today. Regardless of whether one agrees or disagrees with Kantei leadership, it is clear that a completely different policymaking process has emerged from the one that existed up to the 1980s.

2 The Problem of Inconsistency and Noncommitment

2.1 The Various Consequences of Localization

Even if one accepts that the political reforms were an attempt at large-scale self-reform and that they produced concrete changes, many people living through the current Reiwa imperial era after experiencing the political reforms of the Heisei era may still be dissatisfied with the results that emerged. It is hard to deny that the reforms—promoted with much fanfare, and carried out with the wisdom of so many people, and sometimes with painful choices and bold decisions—have not been as effective as had been anticipated. This sense of disappointment is probably related to why there have been so many discussions of reform as the product of a temporary frenzy or fever, a tendency that has become rather conspicuous in recent years.

In this book, the concept of localization was used to analyze this issue. As mentioned earlier, political reforms shared the modernist goal of rationalizing Japan’s public sector and socioeconomy, while at the same time enabling individuals to live autonomously and creatively. However, even though this goal had existed for a long time after the end of WWII, it was still somewhat abstract, and the process of actualizing this goal through concrete institutional reforms in each area required harmonization with how prevailing issues were perceived or recognized. For example, when trying to achieve responsive and rational decision-making in response to changes in the domestic or international environment, the policymaking process would require centralization in the hands of top leadership, while the central bank would require decentralization to strengthen its independence from the government. In the case of Japan, where it was necessary to consider individual reforms on an area-by-area basis for them to be accepted, this harmonization with issue recognition in each area has great significance. After all, until the 1980s, the political decision-making process was bottom-up and decentralized, a fact that could not be ignored when carrying out institutional reform. Even if reformers started from a common philosophy, specific changes in each area had to be reduced to reform proposals that would be acceptable to members of the LDP’s policy tribes (zoku), bureaucrats in various ministries, and related industries. After electoral reform, the nature of inter-party competition changed and the reforms gradually began to have an impact, but that impact was still not strong. As a result, the localization of modernist ideas to be consistent with the traditional perceptions of issues in each area was hugely significant in the formation of a majority that would promote reform.

However, localization was accompanied by other significant costs. As a result of area-specific localization, there was a mix of cases in which the goal was to establish a more centralized decision-making mechanism, as in the case of electoral and administrative reforms, and cases in which the goal was to strengthen autonomy (independence), as in the case of central bank reform and decentralization. Furthermore, there were some cases, as in decentralization, where no clear policy was articulated regarding the type of new decision-making mechanism that would be created after increasing autonomy. There were also areas, such as judicial reform, where localization occurred in the form of rollback by internal actors after the reform was implemented. In other words, reforms that started from the same modernist ideas took on substantially different orientations as a result of localization.

2.2 Inconsistencies in the Multilevel Mixture

As recent political science research has observed, when considering the operation of institutions, it is necessary to consider the interlocking between multiple domains, i.e., the multilevel mixture. The consequences of multilevel mixture are easy to predict when there exist institutions with the same orientation in multiple domains, be they decentralized or centralized. Even in the case of institutional change, it is easy, under these circumstances, to produce expected consequences. In contrast, the mixing of different orientations in different areas can lead to unintended consequences due to multilevel inconsistencies.

In the case of political reforms since the 1990s, for example, electoral reforms that promoted centralization of power at the national level resulted in the consolidation of the power of party leaders within their parties. The strengthening of cabinet functions that resulted from administrative reform pointed in the same direction, giving rise to today’s Kantei leadership. On the other hand, decentralization has weakened ties between national and local politicians within political parties and expanded the scope for local governments to make policy decisions autonomously, thereby reducing the effects of centralization at the national level. It is difficult to say whether the weakened effects of institutional reforms due to such linkages were sufficiently recognized when reforms were implemented in the various areas. Based on the policymaking process up to the 1980s and the power relationships among the involved actors, it was necessary to emphasize that reforms were a response to widely recognized issues in order to form majority support in each institutional area. The price to be paid was multilevel inconsistency.

An example outside of contemporary Japan where reforms have had unintended consequences due to multilevel inconsistencies can be found in the United Kingdom. The United Kingdom originally had a political system whose institutions had the same orientation, called the Westminster or majoritarian type. It had a lower house (the House of Commons) with single-member districts in national elections, and a resulting two-party system; an upper house (the House of Lords) with weak authority combined with a concentration of power in the hands of the prime minister; centralized national-local relations due to constraints on local government resources and capacity; and a relative weakness of judicial independence. The most significant feature was that the locus of power was almost completely determined by which of the two major parties won the lower house elections. In recent years, however, as a result of the transfer of some powers due to EU membership, devolution, House of Lords reform, and judicial reform, the political system as a whole has lost some of its cohesiveness, and individual institutions have come to operate based on different orientations, thus giving rise to contradictions and confusion. Political scientist Kondō Yasushi calls this “institutional decomposition.”Footnote 6

2.3 The Impact of Areas Not Addressed

Another factor that weakens the impression, and perhaps the reputation, of political reforms is that some areas did not undergo institutional change. If we take multilevel mixture into consideration, the existence of areas that did not undergo institutional change diminishes the effect of change—except when other areas are reformed to accommodate that area—just as with reforms implemented with a different orientation. When looking back on political reforms since the 1990s, it is quite significant that some important areas remained unreformed.

One such area is the Diet, particularly the House of Councillors.Footnote 7 Within the Diet, the House of Representatives has undergone electoral reform, and cabinet functions have been strengthened, which has had the indirect effect of meshing well with newly centralized decision-making within the ruling party. However, only the House of Representatives was a target of reform; the House of Councillors has remained largely untouched. Although the proportional representation portion of the House of Councillors was changed to an open list system beginning with the 2001 elections, this change weakened the centralization of power within political parties when compared to the previous closed list system, and worked in the opposite direction of lower house electoral reform and the strengthening of cabinet functions. Beginning with the 2019 upper house elections, a “special quota” was established for the proportional representation portion allowing parties to use the closed list system in some cases, at their discretion, but only within extremely limited bounds. To this day, the House of Councillors electoral system retains many of the elements compatible with the decentralized policymaking seen in Japanese politics until the 1980s, with little awareness of its relationship to the electoral system of the House of Representatives.

Furthermore, neither the policymaking power of the House of Councillors, nor the influence of a House of Councillors majority that differs from that of the House of Representatives, was considered during the political reform process. Of course, the position of the House of Councillors had been addressed in the second report of the Eighth Electoral System Advisory Council, which played a major role in the reform of the lower house electoral system. However, its relationship with the House of Representatives and the cabinet was discussed only in terms of classical concepts like “restraint, balance, and complementarity” and “uniqueness,” which was unavoidable considering the state of academic knowledge about the political system at the time. Since the point of contention of electoral reform was the House of Representatives, this report was never put to use, and no momentum arose to reconsider the authority of the House of Councillors. The opinion of the “Advisory Panel on the Future of the House of Councillors” of 2000, which recommended changes in both the electoral system and the authority of the upper house, contained noteworthy content, but no reforms were made based on it. After the Democratic Party of Japan (DPJ) made great gains in the 2007 upper house elections, depriving the ruling LDP-Komeito coalition of its majority, and producing a “twisted Diet” (nejire Kokkai), the policymaking process stagnated significantly. This inertia continued under the subsequent DPJ-led administration. Collectively, the lack of upper house reform greatly limited the effects of reforming the House of Representatives electoral system and strengthening cabinet functions.

Another representative area that was not reformed was the political system inside local governments. Decentralization has increased administrative and fiscal autonomy, and the relationship between Diet members and local politicians has weakened, partly due to municipal mergers and government change at the national level. This has made it necessary to establish a system that local governments could use to enhance their own policymaking capacity and make rational policy decisions. But there has been little institutional reform along these lines. This, in a broad sense, has diminished the effectiveness of decentralization reform. The basic features of local government—separate elections for local government executives and assemblies, and minimal involvement of political parties in assembly elections and assembly proceedings—have remained constant since the end of WWII. As a result, local governments have continued in a state of lethargy, with the chief executive and his staff setting the major policy directions, and the assembly either rubber-stamping these initiatives or opposing them on unclear grounds. It is difficult to believe that this is the form of local government envisioned at the time of decentralization reform, and transparency and accountability in policymaking have not been sufficiently ensured.Footnote 8

3 Is Reform No Longer Necessary?

3.1 Reform Fatigue and Excessive Criticism

Political reforms since the 1990s have attracted strong interest because of their comprehensiveness, and a great deal of energy has been invested in them. The enthusiasm generated by electoral reform, the anger and disappointment that drove administrative reform and revision of the Bank of Japan Act, the sense of stagnation that preceded judicial reform, and the ideals and tenacity that led to decentralization: all seem hard to imagine today. This is not to say that the reports and findings that set forth the basic policies of reform were wholly immune to the qualities of “Nagatachō literature” or “Kasumigaseki literature”—reports that are carefully prepared by politicians and bureaucrats to avoid words that make any kind of commitment. However, compared to ordinary government documents, they put forth much larger visions and made clearer and stronger arguments, and were sincere expressions of the determination of those who wanted to embark on reforms in their fields. As such, they were able to form pro-reform majorities while confronting forces, such as the mass media, that were skeptical or cynical about them.

However, the presence of strong advocacy and great energy can also become a heavy burden when the tide reverses. The perception that so much energy was needed to advance reform and that, in comparison, the results of reform were not as great as had been touted, led to “reform fatigue” in Japanese society as a whole. In addition, the pursuit of neoliberal socioeconomic structural reforms under the Koizumi administration from 2001—regarded as a representative achievement of political reform—probably encouraged this fatigue. As repeatedly pointed out in this book, it is not appropriate to understand political reform as a facet of broader neoliberal reforms, nor did political reform make it easier to adopt neoliberal policies. Koizumi Jun-ichirō spearheaded opposition to electoral reform, and Takenaka Heizō had nothing to do with either electoral or administrative reform. However, it is true that political reform and neoliberal reform partly overlapped in their timing, and it is not mysterious that some people’s impressions have become jumbled.

Nostalgia for the political, administrative, and economic systems from before reform has also spurred this trend. The 1980s were the pinnacle of postwar Japan. The fruits of Japan’s rapid economic growth were distributed widely, and their negative externalities, such as environmental destruction and transportation problems, were being addressed. The LDP was confident and the bureaucracy took pride in its handling of policy issues. Japan’s presence in the international political economy was growing, and the domestic Bubble economy was giving the business community some elbow room. It is true that in the shadows there were serious structural problems—which became apparent after the end of the Cold War and which is why political reform began—but after 30 years these circumstances have been forgotten. This is probably why there has been criticism that the reforms ruined what was going well in the 1980s. A typical criticism is that electoral reform has produced politicians of “small stature” (the literal translation is “small grains”). While this is an impressionistic argument that lacks any concrete measure of “stature” and does not describe what the supposedly “large stature” politicians were doing in the past, it reinforces the negative assessment of political reform.

With the return of the LDP and Komeito as ruling parties in 2012 and the start of the long-running second Abe administration, it is clear that the problem of inconsistency by area is no longer as apparent as it used to be. The problem of insufficient conformity between monetary and other economic policies due to the Bank of Japan’s emphasis on independence was eliminated with the appointment of Governor Kuroda Haruhiko, who is willing to cooperate with the administration. The ruling parties won a majority in the House of Councillors elections in July 2013, ending the “twist” between the House of Representatives and the House of Councillors, mitigating the problems caused by the lack of reforms to the authority of the House of Councillors and to its electoral system. The judicial branch appears to be stabilizing into a combination of increased autonomy in its relationship with the bureaucracy and restraint vis-à-vis the political system (legislative branch). As a result of decentralization, there remain problems with communication and mutual understanding between the central and local governments, as in the case of U.S. bases in Okinawa, but viewed as a whole, the inconsistency problem has decreased.

Political reform’s inconsistencies were thus resolved in many respects in favor of the central government. As a result, there is even criticism today that political reform has resulted in an excessive concentration of power. Each of the following is considered excessive: Kantei leadership, which is a direct result of electoral reform and the strengthening of cabinet functions; the establishment of the Cabinet Personnel Bureau, which gave the cabinet control over senior administrative personnel appointments and is a direct extension of administrative reforms of the 1990s; and the increasingly pro-administration position of the Cabinet Legislation Bureau, which already had a degree of autonomy that went beyond what is typical in a parliamentary system.

3.2 Towards a New Era

Whether it is “fatigue” with political reform or criticism of its excesses, what these sentiments have in common is that further institutional change is unnecessary or would do more harm than good. And it is also true that the majority of Japanese voters currently do not seek further reform. According to political scientist Sakaiya Shirō, the phrase “constitutional revision” during the 1990s commonly conjured up the image of reform of governing structures, but now—as at other points during the postwar period—it once again implies revisions to Article 9.Footnote 9 Of course, many voters may be aware that constitutional reform includes governance reform, but the call for such reform itself is currently small. It is fair to say that momentum for political reform is scarce.

However, this does not mean that there are no problems in the governance structure and political system of contemporary Japan. Rather, there are many issues that need to be addressed, including those that are currently unnoticed, such as problems surrounding the House of Councillors and the Bank of Japan’s independence; newly emerging issues, such as the relationship between politicians and bureaucrats; and important but low-profile issues, such as the management of local governments. By all rights, it is a time like the second Abe administration, when the government has a stable and ongoing support from voters, that further political reforms should be pursued. If, as this book argues, political reform is essentially a liberal modernist project, then it is precisely during such a time when we are being asked to deal with both internationalization and globalization and their maladies, that we must once again engage in reform.

Some attempts to do so have already begun. For example, in June 2018, Koizumi Shinjirō and other young Diet members released a proposal to change the internal rules and operations of the Diet. The main pillars of the proposal are that Diet operations should be divided into debates between party leaders, deliberations on policies and legislation in committees, and the pursuit of scandals through special investigative committees. It is further proposed that these should be made to run concurrently through an expansion of the Diet’s substantive functions, and that the Diet should be made paperless by using information and communications technology. In March 2019, the PHP Research Institute, a private think tank, published a reform proposal entitled “Governance Reform 1.5 & 2.0.” While it praises the post-1990s political reforms, it argues that further changes are necessary, both as an extension of what has been done so far, such as enhanced competition between the ruling and opposition parties in the House of Representatives, and as a response to the emergence of new socioeconomic and information technology environments, such as the establishment of an independent financial forecasting body. The Ministry of Internal Affairs and Communications (MIC) and other organizations have been studying local political systems. In 2018, the Study Group on the State of Town and Village Councils classified local assemblies into two types: a “concentrated expertise” type and a “majority participation” type, with the former referring to an assembly that proactively participates in policymaking together with the town executive. While currently embroiled in partisan conflict, it is also noteworthy that there are movements calling for the reconstruction of the metropolitan system, as in the case of the Osaka Metropolis Plan, which advocates the merger of Osaka’s prefectural and municipal functions.Footnote 10

Perhaps reflecting the current atmosphere, these reform proposals have not necessarily attracted widespread interest or favorable reviews. The proposal by Koizumi Shinjirō and others for Diet reform has been described as little more than grandstanding to increase the authors’ individual influence, and the MIC study group’s proposal for local council reform has been strongly criticized by the National Association of Chairpersons of Town and Village Assemblies and the Japan Federation of Bar Associations. Of course, in many cases, the proposals currently put forward may not be the very best. For example, even if Diet reforms changed the management of parliamentary deliberation, if this is not paired with a rebalancing of the authority between the House of Representatives and the House of Councillors, it is not clear how it would influence Japan’s political process and policies.

What is important first, however, is to expand awareness of the indispensability of constant self-reform, including institutional change, in order to make the state of politics more appealing. Since localization is almost certain to occur in the reform process, it is necessary to clearly define the overall picture of reform and the ideas that support it, so as to minimize the impact of localization and produce the envisioned outcome in a holistic way. In some cases, such as in the case of judicial system reform, adjustments due to localization may be made after the reform is put into effect. While post-implementation localization may have negative effects, it may also sometimes lead to the consolidation of the reform’s achievements. This was clearly the case with the “Reverse Course” reforms of the 1950s, which rolled back some institutional changes from the Occupation period, for example by abolishing local government police forces (municipal police) and the public election of school board members. There is no need to be overly fearful of localization, but one should be careful when it comes to the fore because of the decline in public attention.

Change will not come from abandoning reform, and the prognosis for Japan’s political, administrative, and socioeconomic situation is not so rosy as to be solvable under the status quo. In order for Japan to overcome more challenging times in the future, there is still much to learn from past attempts at reform, and many things to work on based on those lessons.