The Tokyo Foundation hosted a public seminar entitled “The Challenges Facing the New DPJ Government” in Washington, DC, in mid-January in conjunction with the 16th Annual Japan-US Security Seminar, held to commemorate the fiftieth anniversary of the Japan-US alliance. The event attracted great interest, being attended by over 170 government officials, other experts, and media personnel.

Challenges Facing the New DPJ Government
Keynote Speech by Hideki Kato

Ladies and gentlemen,

Good morning, and thank you for attending the Tokyo Foundation Seminar. It is a great honor for me to be given the opportunity to speak to you today about the current political situation in Japan.

My address is motivated by the fact that the Japanese system of governance is not well understood by those outside Japan. On that point, I have drafted a report on the subject. Please take a look at my article on page seven in the booklet that has been handed out today titled Insights into Japanese Politics and Society .

Today, I would like to focus on two things. The first is governance and the political system in Japan. And the second is the Hatoyama administration: what it’s trying to do, what is happening at the moment, and future prospects.

Governance and the Political System in Japan

A parliamentary cabinet system is generally understood to consist of a process whereby political parties publish manifestos—or policy platforms—the party or coalition of parties that wins an election and has a majority in the parliament assembles a cabinet, and ministers appointed to take charge of the policies advocated in the ruling party’s manifesto implement those policies, using bureaucrats as staff. This is the true meaning of “political leadership.” But in Japan, both parties and voters have tended to pay little heed to manifestos, even though they are essential to the first step of the process, and little effort has been put into producing them. The subsequent steps in the process of “political leadership” have not been established.

The factors behind this situation include the multimember constituency system that Japan employed until the 1990s and the fact that for many years the public did not need to make major political choices. At the root, however, are problems arising from the manner in which the parliamentary cabinet system has been employed in Japan.

Please refer to pages two and three of the handout, Chart 1and Chart 2.

As shown in Chart 1, in an ideal parliamentary cabinet system, the ruling party formulates policies based on its manifesto, and a cabinet comprising influential members of the ruling party is formed to implement those policies. Based on cabinet discussions of basic principles for managing state affairs, cabinet ministers implement the policies utilizing the bureaucrats in their respective ministries. As the cabinet considers policies from the perspective of the overall management of state affairs, this mechanism holds the interests of individual ministries in check and enables bureaucratic sectionalism and regulatory redundancy to be eliminated.

The reality of the system as it has been practiced so far in Japan, however, greatly differs from the ideal, as shown in Chart 2. In this setup, the ministries come first, and bureaucrats take charge of everything from policy formulation to implementation in areas that are within the mandates of their respective ministries. Ministers are effectively figureheads who simply “sit” on top of that structure, as shown by the fact that, at their inaugural press conferences, the vast majority of ministers read out texts prepared by bureaucrats. Most ministers, moreover, have taken to promoting the existing policies of their ministries and speaking for the ministries’ interests and positions as soon as they are appointed, no matter what views they may have espoused earlier. As a result, the ministerial coordination and cabinet leadership expected in a true parliamentary cabinet system take a backseat. The priority given to precedent and bureaucratic sectionalism makes it difficult for the government to effect drastic policy shifts or to respond swiftly to changing social conditions.

Under the new administration led by the Democratic Party of Japan, the so-called council of three political-level appointees comprising the minister, senior vice-minister, and parliamentary secretary has been established within each ministry. This is intended to enable politicians to take the lead in determining government policy, rather than bureaucrats. Newly appointed cabinet ministers of previous Liberal Democratic Party administrations were first given a briefing by the bureaucrats. Soon after the senior vice-ministers and parliamentary secretaries were appointed by Prime Minister Yukio Hatoyama, by contrast, meetings of the political-level council were held—on the very day of the appointment at the Ministry of Education, Culture, Sports, Science, and Technology; the following day at the Ministry of Health, Labor, and Welfare; and within several days at the Ministry of Finance and the Ministry of Land, Infrastructure, Transport, and Tourism. As a rule, the new administration also banned press conferences by administrative vice-ministers—the highest-ranking bureaucrats—so as to revamp the decision-making mechanism that had hitherto been led by the bureaucracy.

Dual Power Structure

Another factor that weakens the power of the cabinet and prevents the parliamentary cabinet system from functioning properly in Japan is the dual power structure consisting of the ruling party and cabinet.

In an ideal parliamentary cabinet system, the cabinet is a team that executes the policies of the ruling party, like the “strong cabinet” in Chart 3. Power within the ruling party is concentrated in the cabinet because those who become ministers are the party’s prime movers, and ruling party lawmakers who are not in the cabinet ordinarily do not defy the cabinet’s policy decisions, much less revoke them.

Under the LDP administrations of the past few decades, however, it became the norm for ruling party members outside the cabinet to wield more power than the cabinet, as shown by the “weak cabinet” in the Chart. As a result, many policy decisions were effectively made through repeated contact, behind-the-scenes “groundwork,” negotiations, and arm-twisting between top ruling party politicians—including “tribal” lawmakers with close ties to specific lobbies—and bureaucrats, in total disregard of the cabinet. This deviates greatly from the principles of the parliamentary cabinet system and obscures who is responsible for making government policy.

The decision-making process within the dual power structure, which has become almost institutionalized over the decades, can be summarized as follows. In the case of the LDP, the party has its own policy coordination section called the Policy Research Council, which checks the bills and other policy proposals put forward by the cabinet. Government bills cleared by the Policy Research Council are then approved by the party’s General Council before being submitted to the Diet. This is called “prior screening” by the ruling party, a practice that is virtually unheard of in other major countries. It is not unusual for government bills to be drastically modified or even rejected in this process. The rejection by politicians outside the cabinet of policy proposals that representatives of the same party drafted in order to implement the party’s manifesto, in effect, amounts to a rejection of the parliamentary cabinet system itself. At the same time, in the sense that it reinforced the impression that any proposal approved by the ruling party would be approved by the Diet, it was also one of the factors that reduced the Diet to a rubberstamping role.

While all political parties have a broadly similar structure, in the LDP’s case the chairman of the General Council, the chairman of the Policy Research Council, and the secretary-general constitute a troika of top party officials who wield tremendous power over party affairs. Under LDP administrations, this troika had more power and a louder voice in many respects than the cabinet ministers, who were the policy chiefs of the government. The three executives controlled policy decisions despite having no legal rights or responsibilities regarding government policymaking. As a result, when a government policy proposal conflicted with the ruling party’s position, instead of the minister rallying the party around the proposal by the government or a government committee, the party’s wishes were often given precedence.

In this regard, the DPJ has brought about many changes. However, the party’s secretary general, Ichiro Ozawa, is still in a position to control political funding and the selection of candidates. Although Ozawa is outside the cabinet, he is still at the center of power. Having control over funding and candidates essentially means being able to control policies.

This results in a weak cabinet, enabling politicians to become a minister even if incompetent. They are not able to grow and develop even after become minister, leading to an increasing number of hereditary politicians. A certain member of Parliament of the UK came to Japan and he said, jokingly, that the House of Representatives in Japan is more like the House of Lords.

The weak cabinet, bureaucracy-led politics, sectionalism, and non-transparent decision making are all deviations from the ideal parliamentary cabinet system.

These are not fundamental, institutional issues, so improvements can be made without overhauling existing political institutions. There is, rather, a need to deal with conflicting interests within political parties. The LDP did not have the capacity to do that. Whether or not the DPJ can do so is something that will be tested going forward.

In a nutshell, this is an issue of party governance. The DPJ is aware of this and has done several things. One, Ozawa has said that he will focus his energies on the management of party affairs as secretary general, not involving himself in policy matters. Another change has been the creation of the “political-level council” comprising the minister, senior vice-minister, and parliamentary secretary to make policy decisions.

Challenges for Hatoyama

Now I would like to refer to what is actually happening now and the future prospects for the Hatoyama cabinet.

Firstly, with regard to reforming the system of political governance, this is something that the DPJ called for in its manifesto and is very important. The issue here is the expectations of the general public and the challenges that are involved.

Reference was made earlier to the mood of the Japanese public. The DPJ’s landslide victory in last year’s general election and the high support rate that Hatoyama continues to enjoy is not necessarily due to the DPJ’s policies but due to the expectations for change.

The Japanese people do not feel an imminent threat right now—security or otherwise. Rather, the public is frustrated by rigidity in society. I believe people are looking for change.

There are many factors behind this mood. Since the administration of Junichiro Koizumi, there has been a widening of income disparities and increases in the burden of an aging society.

I think that one major factor is the media factor.

The Japanese are not very active when it comes to participating in public debate and have low awareness of the need to participate. At the same time, there is pent up dissatisfaction in society. This is the result of media reports critical of the way government and politics are run. While not actively participating themselves, dissatisfaction has built up among the Japanese people over their political leaders.

Each morning, at eight, nine, and ten o’clock, Japanese television viewers tune into what are called “wide shows,” which are essentially gossip shows dealing with celebrity scandals, sports, and to some extent, political news. These shows have stirred up considerable discontent.

Review of Governmental Programs

So, in that sense, the Japanese are looking for change. And the DPJ’s answer to this public mood has been the creation of the Governmental Revitalization Unit within the Cabinet Office.

The Government Revitalization Unit was established in order to reform the overall national administration, including the budget and system of national administration, from the people's standpoint, and also to review the division of roles among the national government, local public authorities, and private companies.

Their first task was to reassess the budget requests for fiscal 2010. It held budget-screening hearings called jigyo shiwake to assess the need for around 450 publicly funded programs, out of the total of some 3,000 for which the ministries and agencies of the central bureaucracy had filed funding requests for fiscal 2010.

Jigyo shiwake is something that we proposed at Japan Initiative, a private think tank I founded in 1997 and still serve as president. We conceived of this idea seven years ago and have been working to have it implemented. We began a campaign of public budget-screening hearings at the municipal level and then moved forward to the national level. We conducted the first hearings for the national budget with the then ruling LDP in August 2008 and also with the DPJ in June 2009 when the party was still in the opposition.

The original intent of this review was not to achieve spending cuts per se but to ring about changes in public administration, whether at the prefectural, municipal, or national level, and also to achieve structural changes to the system itself.

The DPJ promised many new programs in its manifesto, including a child allowance, and it needed to find revenue sources to finance them. Hatoyama became prime minister in September, and the fiscal 2010 budget needed to be put together very quickly. There was not much time. That is why the administration decided to prioritize budget cuts before embarking on the task of making institutional reforms.

The spending review process in full public view was held over nine working days from November 11 to 27, with three working groups handling the assessments.

One feature of the process was that people outside of government would be tapped as reviewers. Things would be seen from the eyes of an outsider. In this regard, the budget assessors ( shiwakenin ) included private-sector analysts, in addition to DPJ Diet members and the senior vice-ministers and parliamentary secretaries of each ministry.

The review took place in a school gymnasium, where the senior bureaucrats from each ministry were seated on one side, and the assessors seated on the other. The assessors asked questions, and the officials responded to those questions.

Another feature was that the process was completely open to the public. All the proceedings were broadcast live via the Internet. This process generated great public interest. Nearly 20,000 people came to watch these proceedings in person, and an additional 340,000 people viewed them online each day in real time.

Before this process began, I warned Prime Minister Hatoyama that once it starts, it will be like a sporting event where the results would be reported daily on television and the newspapers, much like a baseball game or sumo match. And this is exactly what happened.

It is a bit populist in its approach, but I believe that the discussions that took place were at a very high level. Nevertheless, we have only just exposed the issues that need to be tackled going forward.

Around 90 percent of the conclusions of the review process were reflected in the budget for fiscal 2010. Future tasks include reviewing those government programs that were not evaluated this time and deepening the scope of debate to the systems underlying each program.

According to a joint opinion poll conducted by the Sankei Shimbun , a conservative daily, and the Fuji News Network, a nationwide TV station, the Hatoyama cabinet’s approval rating was 68.7 percent right after the inauguration, then dropped to 60.9 percent in October. Unlike his three LDP predecessors, whose approval rating continued to drop, however, Hatoyama’s approval rebounded slightly to 62.5 percent in November. During the review of government programs, it came close to 90 percent at one point. It no doubt helped to boost Hatoyama’s popularity.

There have been some media polls indicating that the approval rating for the Hatoyama cabinet has dipped below 50 percent. The lowest so far as been 48 percent in the survey conducted by the Asahi Shimbun . The aforementioned Sankei Shimbun , incidentally, reported a support rate of 51.0 percent.

One factor behind the decline has no doubt been the money scandals that have surfaced involving both Hatoyama and DPJ Secretary General Ichiro Ozawa. The administration is only three months old, however, and it still remains to be seen whether it can leverage the momentum gained during the budgetary review process to advance the political reforms that the public is seeking. The administration’s ability to make good on its promises is being put to the test.

I would like to conclude my talk at this point with the observation that the success of the Hatoyama administration will probably hinge not just on the personal competence of Mr. Hatoyama but on the effectiveness with which each member of his cabinet and the Prime Minister’s Office fulfill their functions.

Thank you very much.

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