In the following, I will focus on the political leadership in Japan. Two days ago I visited Gaza and the West Bank and I am now convinced that it will be very important at a later stage in the Palestinian state-building process to integrate the whole region of the Palestinian nation and also, at the same time, to have some form of decentralized government to respond to various needs in the different regions. Consequently, I would like to talk a little about the development of the central and local government relations in Japan.

Japanese politicians have constantly been labeled 'weak'. In the international arena, Japanese politicians, especially the Prime Minister and top political leaders, are practically invisible and few people understand what they are doing. Domestically, it is also often said that the Japanese political leaders are very weak and should show more responsibility, which is one of the reasons why Japan is currently going through a process of political reform. One reason why Japanese Prime Ministers have been criticized is related - or so some people believe - to the fact that harmony, teamwork, consensus, etc. characterize Japanese culture. The same thing applies to companies and politics, with the leaders of the government usually leaving substantial decision-making power in the hands of lower-ranking officials, whose job it is to initiate the ideas and then negotiate through the organizational process. It is therefore very understandable that the top leader faces some difficulty in bringing about the top-down decision.

In the post-war history of Japan, there have, nonetheless, been a few good Prime Ministers and top politicians, which means that the cultural aspect is not the only one. On the other hand, there were people such as Prime Minister Murayama Tomiichi, who, at the time of the earthquake in Kobe, was very slow in responding to the emergency, for which he was criticized by the mass media. There again, immediately after World War II, Yoshida Shigeru was elected as Prime Minister and he was a very strong leader.

In order to make sense of this kind of variation, it is useful to apply some conceptual frameworks. Here I would like to introduce a leadership model called the 'PM Model': 'P' means performance - performance in leadership means that the leader says that he will do something and then goes ahead and does it - and 'M' means maintenance - i.e., to maintain the support of the people, which is very hard for a leader to do. Using this kind of conceptual dimension in regard to Japan, one can see that there are four kinds of leadership:

· PM - someone who is good at performance and also at maintenance;

· Pm - someone whose performance is good but who is not good at maintenance;

· pM - someone whose performance is poor but whose maintenance is good;

· pm - someone whose performance and maintenance are both poor.

Anyone who looks at Japanese history in detail will realize that Japan has had leaders from all four categories. In Japan, where the dimension of maintenance is very important, it is usually difficult for Japanese leaders to focus on the performance aspect.

The typical view of economists is that the Japanese market is a multi-conditional kind of thing that serves as the driving force behind Japanese economic development. As a political scientist I would like to focus on the other side of the story and on three dimensions of the basic elements, each of which has the market side, the legal side and the political side.

1) Legal market dimension

As is well known, the butcher is very important because everyone needs meat. If there is one butcher in the kingdom, he should be a good person and care about the community, although of course he will also pursue his material interests. Now, if the king suddenly says to someone else, "Okay, you can be a butcher too," this will 'de-monopolize' the situation, which is what happened in Japan some 200 years ago when there were so many monopolized occupations, as well as in many other countries. If the butcher wants to maximize his profits, things will be very different as he will buy at a low price and sell at the highest price possible. If the king realizes this is happening, one option would be to tell the first butcher that he has been replaced by a new butcher, and the second option to let anyone become a butcher, which means that the first butcher, if he wants to maximize his profits, should sell at a lower price in order to compete with the others. In this kind of free market competition, resources can be used very effectively and one can buy at cheaper prices, although, of course, there are various things that cannot be sold in a market. To provide public goods, one cannot count on the market freedom so the government is needed, which is responsible for collecting taxes, etc. The way the government intervenes in the market is dependent on the political issue and this is the first dimension.

2) Comparative advantage

The second dimension is the trade issue or free trade and the target of the concept of the comparative advantage. If two countries, 'A' and 'B' produce two different products - automobiles and wheat - and if 'A' is better at producing autos than 'B' and 'B' is better at producing wheat than 'A', there is no reason why both countries could not produce both autos and wheat. On the other hand, 'A' could specialize in autos and 'B' in producing wheat, which would result in both countries becoming richer than they would be if they both produced autos and wheat. Japan is producing rice, but the price of the rice is six times higher than in the international market. Nevertheless, the government wants to produce rice. Why? Because it argues that in Asia, where there is an economic crisis, the government wants to have a national project and to produce its own crop; in other words, Japan has a case of market versus politics. It is easy to say that competitive advantage is needed rather than comparative advantage, but in some sectors, this is not possible. In 1957, the Japanese Ministry of Transportation was reluctant to have a Japanese car industry but the next year it became impossible to import cars from the United States so the government decided that the priority was to export; it was a government issue and the Japanese car production increased. Imagine that two people in a country, 'A' and 'B', have different incomes. 'A' earns US$100 million, 'B' earns US$1,000, and the government is providing them with 100 liters of water each, for which they both have to pay a tax. There are three different methods suggested for payment.

1. The first option is that because 'A' is rich, the payment would be related to 50 percent of his income while 'B' is poor, so the tax would be related to five percent of his income.

2. The second option is that the payment represents ten percent of the individual incomes of 'A' and 'B'.

3. A fixed sum of US$800 should be paid by each of them.

There are various judgements as to which is the fairest system. In Japan after World War II, all these three issues were squeezed together.

There are three main political parties in Japan:

· Liberal: The Liberal Democratic Party (LDP) - pro-United States

· Democratic: The Social Democratic Party (SDP) of Japan - more autonomy

· Socialist: The Democratic Socialist Party (DSP) - neutrality

The LDP held a near-monopoly of government from its formation in 1955 until 1993, and was returned to power in 1994. Opposition parties in Japan have been in flux since 1994, with membership shifting between several new bodies.

The beliefs of the different parties are mentioned in the table hereunder

On the economic issue, both the Socialists and the Democrats believe that the United States does not open its markets to Japan and wants to sell Japanese products in China.

After Japan became independent, the Liberal Party was in rule but during the second half of 1954, Premier Yoshida's policy of close collaboration with the United States was strongly criticized by dissidents within the Liberal Party, who went on to form the Japan Democratic Party. Subsequently, by virtue of Socialist Party support, the Democratic Party leader Hatoyama Ichiro was elected premier. The Democratic Party and the Liberal Party merged in November of that year, giving the government an absolute majority and inaugurating the power monopoly of the LDP.

Until the early 1970s, there was a close correlation between candidate support and LDP support. Ever since 1966, the LDP support rate has been decreasing and then recovering, which means that the political leaders of the LDP, including the various Japanese Prime Ministers, have spent a lot of time finding new supporters and bringing more people into their party. Although the LDP continued to hold the reins of government throughout the 1970s, the party's cabinets frequently changed, as factional infighting substituted for the alternation of governing parties. In 1975, the LDP was torn by factional strife and failed to pass most of its major bills and in the elections, the LDP lost its majority in the Lower House for the very first time. The LDP, which suffered a further setback in the 1983 elections, won its greatest landslide in 1986. Japan in the early 1980s faced urban overcrowding, environmental pollution, and unproductive agriculture, but it had the highest rate of economic growth and the lowest inflation rate among leading industrial nations. However, economic growth began to slow down in the mid-1980s, in part, because the strength of the yen against the US dollar had a dampening effect on exports.

In 1989, the Japanese Government announced the introduction of a new consumer tax - there had never been a consumer tax before - which resulted in decreased support for the LDP, whose support rate has since continued to decline. This decline is mainly due to demographic reasons and the fact that many people were moving from rural areas to urban ones. A very rational strategy of the LDP involves catching new groups, mainly by using various economic measures.

The LDP won decisively in the parliamentary elections of February 1990, although the Tokyo stock market had begun a decline that would last until mid-1992 and see the Nikkei average lose almost two thirds of its value. Against a background of continuing tension with the United States over Japan's trade surplus, confidence in the government continued to decline as the Japanese public became increasingly frustrated with the stagnant Japanese economy and corruption. In the 1993 elections, the LDP lost its majority, ending its 38-year dominance of the Japanese Government. A fragile seven-party coalition was formed, and the LDP became the main opposition party.

In 1996, the leader of the LDP, Hashimoto Ryutaro, replaced the Prime Minister in the coalition government, marking the return of LDP dominance, and in September 1996 the Prime Minister called for an early general election. The poll returned the LDP as the largest single party but one that did not have an overall majority. In 1997, the LDP recovered its majority in the Lower House for the first time since 1993 but still proved unable to remedy the country's continuing economic downturn.

With regard to the various reasons behind the formation of the LDP, one of the obvious reasons is related to the Cold War. The Socialist Party was divided in the early 1950s into the left wing and the right wing and in 1954, merged into a large unified socialist party. Many people believed that the Socialists would increase their popularity in the future, which accounted, in part, for the formation and popularity of the LDP.

As to the question of how the Prime Minister managed the maintenance, the most important aspect is the inter-party management, because if the LDP is unified and the leaders agree with the existing Prime Minister, then everything will go smoothly. In the early 1960s, the Prime Minister used to choose his close allies within the LDP as ministers, but gradually the ministerial position distribution became very institutionalized and based on the size of factions. In addition, a new system was established whereby after five years, a member of the LDP could be elected as a vice-minister of some ministry and then after six terms become a minister.

Constitutionally speaking, every individual parliamentarian can send a question to any minister and force him to answer it. In the parliamentary deliberation, members of the Parliament can also raise questions in front of some of the bureaucrats, but they do not use this system so effectively. In the parliamentary cabinet system, most of the members of the Lower House support the Prime Minister and it is very difficult to influence the government and make it establish a policy-making process, which is why there is a tendency to try to negotiate or reach compromises with the government.

With regard to the decline of the LDP, this was related to demographic changes in Japan and to the fact that the party was criticized for not being active in the areas of social welfare and environment. However, in the early 1970s, the LDP changed its policy and introduced very extensive and intensive social welfare policies and very strict environmental regulation policy in a bid to maintain power. Today, the LDP is gradually recovering.

Traditionally, the middle class used to be very stable in their political support for the LDP, but in the 1970s, there appeared the so-called 'new middle mass'. In Japan, in any vote almost 80-90 percent of the people are in the middle mass, and what happened was that many of the 'middle mass' people whose wellbeing was not steadily based on real estate found themselves receiving money and protection from the government. Naturally, they do not want to lose their benefits, but they are very critical in a sense and somewhat independent, so whenever there is a governmental scandal, these people tend to go against the LDP, unlike the traditionalists.