SEMINARS

Training and education in international affairs:
Japan, Palestine and the Middle East (1999)

The Decision-Making Process in Japan

In talking about the institutional aspects of Japa­nese politics, I would like to begin by saying that given the political development, Japanese politi­cal leaders, especially the Prime Minister, need to very careful when it comes to maintaining and expanding their support using the various avail­able policies.

In post-war Japan, there have been various mechanisms to redistribute income, for example, the ‘explicit distribution’ of income mechanism. This involved a progressive tax system and so­cial welfare, which was based on the idea of transferring income from one area – taxes, par­ticularly those paid by the rich - to another – social welfare payments such as unemployment benefit, mainly to the poor. In this regard, Japan was behind many other countries for a long time as until at least the early 1970s it did not have any intensive social programs.

 

In the late 1950s, there was something called ‘implicit distribution’ when the government in­troduced very protective agricultural laws and bought up all the rice from the farmers at a high price, the very political objective of this being to compensate them. In the past, farmers had been richer than other people, but once the economic development and industrial growth started, the income gap between rural areas and the urban ones became bigger and whereas workers and other people became richer, the farmers were left behind. Even before the war, rural life was dete­riorating and in many rural families, the father actually sold his daughter as a Geisha girl or a prostitute, especially in the north of Japan, and this kind of social problem was one of the rea­sons behind the Japanese invasion of China. However, in the post-war period, the govern­ment tried to alleviate the poor conditions of the farm­ers by using this protective agricultural policy and since 1955, the domestic price of rice has increased, as has the income of farmers. Al­though this was not referred to as a social wel­fare policy, functionally speaking this kind of

protective agricultural policy played a role that was very similar to that of social wel­fare. Worthy of mention is the fact that immedi­ately after the war, the socialists were very pow­erful in rural areas but once this protective agri­cultural policy was implemented, the situation changed.

 

There are similar kinds of ‘implicit redistribu­tion’. For example, in Japan it is usual for any large company wishing to open supermarkets in downtown districts to first go to the area and negotiate with the small shop-owners in that area with a view to reaching some kind of an agree­ment. Another example involves the textile in­dustry; in the 1970s, the Ministry of Interna­tional Trade developed some very interesting policy for the textile industry, which was then applied to other industries in order to prevent unemployment. There are many other examples.

 

With regard to the institutional arrangement that supports this implicit redistribution, of obvious importance are the elections. In Japan there are two houses, the Upper and the Lower, but for the sake of convenience I will focus on the Lower House only, which has 511 members. In the Lower House, the Prime Minister is elected ac­cording to the direct elections program that was introduced three years ago. The one unique as­pect of the Japanese election system is the so-called SNTV System (or Single Non-Transfer­able Voice system). Typically, for the Lower House election, one election district elects five parlia­men­tarians and for each district, there are be­tween five to eight candidates of whom the voters vote for only one.

 

If we have three candidates ‘A’, ‘B’ and ‘C’ and candidate ‘A’ belongs to the Nakasonic faction, candidate ‘B’ to the Oguchi faction and candi­date ‘C’ to the Tanaka faction, the election cam­paign is then based on the Habatsu system. Inter-party competition is deeply rooted and serves as the very foundation of the Habatsu system. What are the implications of this system? If ‘A’ wants to get elected, he does not have to have a major­ity as 20 percent is enough to win. Thus, ‘A’ will say “I am a friend of sponsors and in the Diet I will protect you by producing more protective policy motions” and candidate ‘B’ will say: “I am a friend of xyz and I will protect you,” etc., so this election system tends to result in politics being based on ‘implicit distribution’.

The second important decision-maker is parlia­ment itself. The Socialists like to see themselves as standing against the government and they usually take a very strong stand during the par­liamentary sessions. On average, the LDP pos­sessed maybe 60 percent of the seats in the 1960s and even in the 1970s, the LDP main­tained the majority. The government usually sends a bill to the parliament and if this bill is very important, the LDP Minister in charge will explain what this bill is all about before it goes back to the committee to be discussed and then returned to the parliament.

The practice of the opposition parties is to send as many memoranda as possible to the appropri­ate committee, which will usually gather to de­liberate three days a week, on the subject of a bill that they oppose. It takes a long time for a bill to be passed, especially as the opposition parties use various methods to delay its passing. If the LDP government wants to expand its sup­port, then it has to make concessions. In one year, there are 200 days of sessions with three meetings being held each day due to the lack of space.

Although parliamentary members can initiate laws, 70 percent of the bills originate from the government.

Due to the style of the Japanese elections system and this parliamentary system, it is very easy for the opposition parties and the different factions of the LDP to realize their demands. In the 1970s and 1980s in Japan, if the economic situa­tion was bad, the LDP was able to win massive support because people believed that only the LDP could solve the problem.


The issue of the central and local government relationship is related to the issue of internal politics. In Tokyo, there are seven candidates for the elections, among whom there is a very inter­esting commonality. The Government of Japan was experiencing very serious economic diffi­culties, as was local government and even the Tokyo Metropolitan Government, for whom the financing of its budget is a very important issue in the elections. Almost all candidates say that the central government should give financial aid to the Tokyo Metropolitan Government. Japa­nese local government has only a 30 percent share of the total tax in the country, the other 70 percent going to the central government.

 

Local Government

Central Government

Tax

30%

70%

Expenditure

70%

30%

The statistics pertaining to the share of the total tax are similar to those found in Northern Euro­pean countries, but a unique aspect of the Japa­nese system is the expenditure. The local gov­ernment spends almost 70 percent of the total budget while the central government spends only 30 percent, which is why the central government transfers some money to the local government in the form of ‘local transfer tax’; the poorer the local government, the more it receives from the central government. The Tokyo Metropolitan Government is the richest in Japan and it has never received any local transfer tax, but it has learned a few lessons and so all the candidates in the upcoming elections are demanding that the central government give local transfer tax to their local governments too, including the To­kyo Metropolitan Government.

 

These days, the World Bank (WB), the Interna­tional Monetary Fund (IMF) and many interna­tional organizations strongly argue that many countries, especially developing countries, should have decentralized governing systems or local government. Some developing countries or ex-socialist countries introduced very decentral­ized governing systems, but to date, they have not been very successful. When the WB asked some Japanese political scientists and econo­mists to do some research on Japanese central and local governments, we found ourselves looking at two types of models: the autonomous model and the integrationist model.

 

1)      The autonomous model

 

The autonomous model that the WB and IMF have been proposing means that the local government can have 20 percent of the tax and 20 percent of the expenditure while the central government spends the remaining 80 percent.

Local Government 20% tax / 20% expenditure
Central Government 80% tax / 80% expenditure

This means that there are very few interactions between central and local government.


2) The integrationist model

The integrationist model is like Japan’s local government with 20 percent tax and 80 percent expenditure for the local government and 80 percent tax and 20 percent expenditure for the central government.

In America the two models are called the ‘layer cake model’ and the ‘marble cake model’.

At the time of the ‘Meiji Restoration’ Japan tried to establish a very centralized state, this kind of centralized government being very common, the aim being to modernize the system. It is very useful to have a centralized government and to implement and devise the same policy for all the people, but at the same time it is somewhat difficult to implement various policies from the top, which is why there need to be different arrangements for implementing various policies.

Japan decided to have three government sys­tems: central government, prefecture and city/village/town, with the latter two kinds be­coming the local government after World War II. The basic idea was that the central govern­ment would use the prefecture governor as the agent of the national government and to monitor or direct these local governments, but various pol­icy implementation is very rarely in the hands of these local governments.

After World War II, the American occupational forces came and tried to democratize the Japa­nese system, the most important reform being that the prefecture governor and prefecture con­sul both had to be directly elected. So, after World War II, the prefecture and the city/village/ town became the local government. It is under­standable that the central government was not so happy with this reform because it lost some im­portant power over the local govern­ments. Ac­cordingly, some adjustments were made after the occupational reform resulting in three mecha­nisms to assure the central govern­ment control over the local government. The first one is that the central government sends some delegates to serve as high-ranking officials in the local gov­ernments - the so-called ‘person­nel dispatch’ - and the second is the ‘agency delegated function’. The central government, wanting to maintain some control over the popularly elected prefec­tures, has tried to estab­lish various control mecha­nisms but this is an extremely difficult process.

The bottom line in the integrationist model is that the local government needs some money from the central government in the form of subsidies and the central government tries to use the subsidies to control the local government.

On social issues, the national government wanted to ensure that all the people in Japan have the same standard of living, and instead of delegating this task to the local government, it decided to use another agency. With this very integrationist model, different governments as well as prefec­ture governments could demand more help from the national government, and in many instances, mayors and governors would use the same ar­gument, saying, “We are imple­menting this pol­icy for you, so you ought to give us more money.” It is only natural that poorer villages and cities in particular are eager to do this and also that their respective politicians are very cooperative with the governors in demand­ing more money. Therefore, this integrationist model functions in a very similar way to dis­tributional politics.

 

Now, in the World Bank - and also in Japan - this model is no longer so popular and there are now some reformists and government agencies in Japan that are trying to reform the whole sys­tem. This agency-delegated function is being abolished this year in order to put more power in the hands of the local government.

 

It is very difficult to decide to what extent the central government should transfer money from the rich regions to the poor ones. It takes ages to get to work in the Tokyo metropolitan area, which often involves taking a train and standing in one position for a very long time, which is extremely tiring. In the northern or western parts

of Japan there are much fewer people so traveling is far less stressful. In addition, there are many museums, etc. run by local governments, unlike in Tokyo, which is a source of great annoyance to people living in Tokyo. So much money goes to the rural areas, whereas in urban Tokyo, par­ticularly in the western part, the situation is very bad. This is partly because the system according to which we calculate the basic needs of the local governments is very complicated (number of peo­ple, income levels, etc.). Within this sys­tem, Tokyo has many disadvantages that make re­forms necessary. It is argued, for example, that more local autonomy and competition should be intro­duced, whereby the local gov­ernments would compete with each other in pro­viding a high level of services, and a decent tax system, etc. The idea is that with more power in the hands of the local government, the people who are disap­pointed with their services in one region will move to a region where the services are better.

 

The local governments should be more prudent in using tax money and improving social welfare services or whatever. Obviously, every local government wants to have richer rather than poorer people under its jurisdiction and therefore more tax income and less social welfare.

 

If the central government is too powerful, which is the case in many developing countries, then it is moving towards a more autonomous model. The Japanese experience showed that it is important - but also difficult - to maintain some kind of integrationist mechanism within the system. The basic idea in Japan is to keep power in the hand of the local government but to maintain some critical jurisdiction in the hands of the central government. The government is now trying to introduce a system whereby if the local government is not satisfied with the central government intervention, it can appeal to the court, which will demand that the central government explain the reasons and the terms that it uses to control the local government.