Japan's six-month experiment with a new government is entering a critical phase. There are fundamental contradictions in the campaign pledges Prime Minister Yukio Hatoyama's Democratic Party of Japan (DPJ) made to the country in 2009. Those contradictions threaten to upset whatever electoral chances the party has of obtaining a majority in upper house elections this summer, let alone of preserving the current DPJ-led coalition cabinet.
The situation already appears dire. The victory of the Liberal Democratic Party (LDP) in the Nagasaki gubernatorial election on February 20, 2010 will embolden opponents in the Diet, the bureaucracy, and the "fourth estate" to stick to their course of criticism and obstruction. Tokyo will remain the object of foreign ridicule as a dysfunctional capital. And absent a new strategy for the Hatoyama cabinet, the LDP and other opposition parties can act with confidence that the incumbents will pay the price for any deterioration in government-business relations, economic growth, and political stability.
This problem goes directly to the contradictions in promises made by Hatoyama's DPJ. As a political party, the DPJ pledged to change how government worked in Japan by moving power from the ministries to the cabinet, and by restoring transparent decision-making to the electorate. But they also promised ambitious initiatives in the name of "livelihoods first," including reform of the tax system, establishing regional sovereignty, and major actions to ease global warming while creating new jobs.
At some point, the DPJ's rhetoric was destined to collide with the interests of its coalition partners, big business, and the bureaucracy—all of whom struggled to understand how such sloganeering would work in practice. The Hatoyama cabinet could have expended its limited political capital to enact major changes in the policy-making process or they could have negotiated smoothly with various interests in the current decision-making process to pass minor economic reforms, but they could not do both at the same time.
Consequently, Hatoyama found himself relying on Ichiro Ozawa, the old-school LDP politico turned DPJ secretary-general. By implementing a strategy of inside deal-making on issues ranging from the fate of the U.S. military's Futenma base in Okinawa to granting local suffrage to foreigners, to haggling over the national budget with coalition partners, the scandal-tainted Ozawa has been able to keep the DPJ coalition from fracturing before the upper house elections. Yet this has also alienated independent voters, a growing segment since the 1980s, who don't like LDP-style backroom deals, however necessary they may be.
A related contradiction was between the Hatoyama government's shaky commitment to moving power to the cabinet and its fear of causing major disruptions in the economy, the stock market, and international relations. During the 2009 general election campaign, this proposal allowed them to unite the left, which believed in the rhetoric of institutional "change," with the center, which appreciated how a nominal regime shift might stimulate consumer-oriented growth without making an already sluggish economy any worse.
In practice, this meant making lofty policy speeches to the Diet in which policy was ironically never discussed. The electorate learned about the prime minister's personal philosophy and his vague desire to "protect people's lives," but not about what he intended to do while in office. Those inclined toward left-wing populism now view the premier and his party as maintaining the status quo, while corporate Japan views them as out of touch with the mounting problems facing the economy.
And by avoiding policy specifics—by failing to provide a cogent and transparent explanation of what the government is doing and why they are doing it in this fashion—Hatoyama has left independent voters confused about his goals. Without a coherent DPJ narrative, these voters are open to a counter-narrative blaming DPJ ineptitude for burgeoning deficits, high unemployment, and on-going deflation.
The LDP's gubernatorial victory and falling support for the Hatoyama cabinet are also a referendum on the decision-making process. To date, the DPJ has suggested a modest increase in the number of political appointees to the ministries (from the current 80 to roughly 100), the abolition of party-sponsored research councils, and the establishment of a "National Strategy Bureau." Yet the critical issues were always the staffing, resources, and time afforded to these elected representatives relative to the ministries. As long as politicians received only two to three staffers, were allotted a mere 7 percent of the national budget for the cabinet and Diet, and were left out of the loop on ministerial advisory councils, the Hatoyama cabinet could not be expected to exercise any real authority over the decision-making process.
These realities were driven home during the fiscal 2010 budget talks. The ministries were ordered to reduce "wasteful spending," but only produced a combined total of ¥1.3 trillion in savings (versus the cabinet's expected ¥7 trillion). Rather than standing behind his party's policy promises, the premier simply waffled on DPJ pledges to repeal the gasoline tax, eliminate highway tolls, and achieving ¥12.6 trillion in spending cuts by 2011. Hatoyama's DPJ now presides over the largest general account budget (¥92.3 trillion) in Japan's history with little to show for it.
The disillusionment of so many of the DPJ's former supporters since the August 2009 election cannot be blamed solely on the premier's indecisiveness or the recent financial campaign scandals involving the party leadership. The party itself needs to come out fighting to resolve its contradictions. If the government does not reconcile these contradictions, an electoral defeat ushering in a more fragmented House of Councilors seems increasingly likely.
Paul J. Scalise is a former Tokyo-based financial analyst and currently an adjunct fellow at the Institute of Contemporary Asian Studies, Temple University, Japan Campus.