Organizer: Nobuhiro Hiwatari, University of Tokyo
Chair: Haruhiro Fukui, University of California, Santa Barbara
Discussant: Edward B. Keehn, University of Cambridge
The years 1993-94 will be remembered as a turning point in Japanese postwar history. One party dominance by the Liberal Democratic Party has been terminated amidst the longest recession postwar Japan has seen. No longer can we take for granted what seemed to be everlasting characteristics of the postwar Japanese political economy: one party rule, the left in permanent opposition, state led economic adjustment, or invincible global competitiveness. Thus we find the so called 1955 Regime in disarray.
Disturbing for social scientists is the challenge recent political and economic changes present to the prevailing scholarly accounts of the 1980s. These took for granted that the Liberal Democratic Party had broadened its popular base and asserted its influence over the bureaucracy, that the left opposition had become even more marginal, that private business was no longer subject to bureaucratic guidance, and that Japanese industry had become even more internationally competitive. In other words, no one doubted that the 1955 Regime had managed to adjust to political and economic changes, without having to change its main features. The recent "collapse" of the 1955 Regime brings to the fore the question, "What went wrong?" and "Why is political and economic reform the prevailing theme right now in the Japanese media?"
In this panel, we intend to answer two related sets of questions. First, what caused the recent "changes" in the postwar political economy and thus how much has really changed? Second, what can be salvaged from the rosy images of the 1980s and what needs to be revised?
More concretely, Mark Tilton will examine to what extent Japan has shed its cartel prone past in adjusting to economic changes by assessing the consequences of anti monopoly reforms. Nobuhiro Hiwatari will explain how policy reforms of the 1980s were coordinated by the bureaucracy and led to the convergence in policy positions of the major parties in Japan. Against this backdrop occurred the change of ruling parties in 1993. In accord, Bob Bullock will argue that seemingly drastic changes in rice policy only reinforced the power of the bureaucrats at the expense of political leaders and farmers. Finally, Kato Junko will show how the ruling party fell victim to its ability to incorporate wide social interests by weakening its organization coherence.
Taken together, this panel will examine what has and/or has not changed in the postwar political economy, and how that caused the 1955 Regime to fall in disarray. It will also consider what can be regarded as the merits and flaws of previous research. The proposed papers, as the result, will provide a better understanding of current ongoing changes in Japan and an orientation for future studies of Japanese political economy.
Mark Tilton, Purdue University
A central question about the Japanese political economy has been whether it is fundamentally ordered by collusive arrangements by private cartels and the state, or whether it is driven by recognizable market principles. U.S. concern that collusion blocked access to the market led it to push Japan to toughen its Anti Monopoly Law in 1991 and 1992. This paper will consider the degree to which these reforms represent genuine change in the Japanese political economy.
It will first consider whether the reforms were due solely to U.S. pressure, or whether there was also a domestic constituency for them. In the domestic debate over the policies can we see a shift from producer to consumer dominated politics, with those paying the costs of domestic cartels rising to support the reforms? Did the "reform" Hosokawa government bring meaningful new support for tough anti monopoly policy?
Second, how vigorously have the reforms been implemented? How does enforcement compare to earlier periods in Japan and to levels of enforcement in Western Europe and the U.S.?
Third, what has the effect of Anti Monopoly Law reform been on Japanese markets? Much attention has been given to the "collapse of prices" in Japan during the current recession and high yen period. To what degree is this due to a stronger Anti Monopoly Law? While competition in retail markets has been invigorated by new imports and discount stores, other vast sectors of the economy, such as steel and chemicals, seem untouched, not to mention the 40% of the economy still directly controlled by government regulation. How can we explain the coexistence of new competition in consumer goods markets with resistance to change in heavy industry?
In sum, the paper will explore whether the Anti Monopoly Law reform is a sign that Japan has made a significant transition to a pluralist, interest based political economy in which consumers and industrial purchasers of intermediate goods are willing and able to act aggressively in the market and political system to assert their interests.
Robert W. Bullock, University of California, Berkeley
This paper focuses on developments in agricultural policy since the July 1993 loss of power by the LDP. It shows that although the new Hosokawa administration had many reasons to reform agricultural policy, it held even less control over policy than did the LDP. The most important reform, the December 1993 decision partly to open the rice market, was negotiated by the bureaucracy with little input from the political parties. The deal was designed not to reduce domestic food prices or to make the farm sector more competitive, but to accommodate international market opening pressure and, equally important, to strengthen Japan's food control system. The agricultural bureaucracy won new powers and resources at the expense of both the political leadership and the farmers themselves. The paper also provides background analysis of the food control system and its impact on Japanese farming and politics.
Kato Junko, University of Tokyo
Immediately before a major political change in 1993, both the pluralist view and the rational choice explanation were increasing their influence in Japanese political studies. Despite their difference in analytical frameworks, characterizations of the political system and interpretations of the political phenomena were similar between the two views. First, both positively evaluated the predominant LDP's sensitivity to changing policy demands and showed the effectiveness of political representation in policymaking under the one party predominance of the LDP. Second, they argued that incorporation of social interests into policymaking was ensured by the extensive competition inside the LDP. Third and most important, both regarded the internal organization of the LDP as a product of organizational adjustments to the changing policy demands and shifting conditions for electoral competition. Subsequently, they concluded the increasing influence of the LDP politicians over policymaking and challenged the bureaucratic dominance view. Though these views provided an excellent account of the continuity of the LDP's long term rule, neither fully came up with the 1993 change in which the LDP's rule was broken by its own party split.
The paper attempts to explain the reason for the LDP's breakup and high popular support for the non LDP coalition governments (the Hosokawa and Hata cabinets). More specifically, the paper will follow a process of organizational changes of the LDP since 1955 and argue that the LDP's attempt to strengthen its rule resulted in weakening the coherence of its own organization and posing a dilemma for the LDP members. It also examines the impact of the LDP's interorganizational changes over partisan dynamics and electoral politics.
Nobuhiro Hiwatari, University of Tokyo
Why, after 38 years in power, was the LDP government ousted in spite of an increase in its popularity, and why was the Socialist Party able to join the ruling coalition, despite its past as an anti system party in the 1955 Regime? These are the questions I intend to address in my paper.
My conclusion is that the policy reforms of the late 1970s and 1980s led to the collapse of the anti system (or "anti monopoly") left in Japan. This caused both the ruling party and the opposition to converge in their socio economic policy positions and undermine their organizational cohesiveness. In short, the 1955 Regime ended not because of mounting dissatisfaction with the prevailing framework of politics but because of the transformation of the Opposition due to the success of such politics.
More concretely, first, I will discuss how business and labor reacted to the economic and social problems of the two oil crises. I will show how the need for rapid adjustment strengthened management labor collaboration in big businesses, how it consolidated moderate labor leadership within the national labor movement, and how it decisively weakened the radical left labor movement which had been dominant until the mid 1970s.
Second, I will show how this adjustment led by the big business sector conditioned the role of public policy. By examining employment industrial policies, social welfare reforms and fiscal reforms as my cases, I will illustrate how the role of bureaucracy was to either support the vulnerable sectors of the economy (that is, the smaller businesses and the self-employed) or to coordinate the interests of big business and those of small businesses and the self-employed.
Third, I will demonstrate how the competition among political parties became increasingly focused on the interests of local constituents, instead of competing over ideological or policy alternatives. This was the result of the collapse of the radical left social forces and the preeminence of bureaucratic coordination. The lack of mass party organization by either the Liberal Democrats and Socialists, on the one hand, and the need of the center parties to gain access to bureaucratic policy making, on the other, only facilitated this process.
In this endeavor, I will critique the prevailing theories of the 1980s, which argued that ruling party influence increased in policy making and that the reforms of 1980s were proof of the ascendancy of "neo liberal" (or "neo conservative") forces.
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