Japanese Politics Since the 1990s: Intolerable Solutions to Intolerable Problems


A description of the current Japanese government must begin with the fall of its last iteration. The glittering world-dominating supertechnological of the 1980s fell apart in 1990, when the real estate and stock speculation bubble burst, leaving the money in ‘s banking system tied up in loans given to stock and real estate speculators. In the early 90s, with the borrowers nearly bankrupt and their collateral devalued, the banks lacked the resources to make any new loans (Lecture notes, 10/14). Only a massive restructuring and deregulation could increase the growth of the economy, but the Japanese electorate consistently voted against policies that would result in mass lay-offs and bankruptcy (McCargo, 68). This economically intolerable depression and its socially intolerable solution would form the fulcrum of political conflict until the present day.

As the business world fell apart, the politicians it supported became increasingly unstable. Soon, “the costly structure of doing business within the country-with its political bribes, high entertainment costs, and irrational and often whimsically interpreted regulations-led to demands for political reform” (Pempel, 141). This tension produced a crisis in 1993, when the Liberal Democratic Party, which had controlled the government since 1955 (McCargo, 93), fell to a vote of no confidence put forth by the opposition parties (Schlesinger, 268). The opposition had little hope of deposing the LDP alone, but the driven LDP reformist Ozawa Ichiro used internal tensions within his party to produce a splintering of new opposition parties (Schlesinger, 270). These new parties joined forces with the Socialist Party of Japan to take control of the government.

The new coalition pushed through a voting reform bill that replaced the old multi-member constituency, single non-transferable vote system with the current 60/40 split of lower house seats between single-member constituencies and proportional representation of 11 regional blocs (McCargo, 93). The new voting system was designed to break the LDP monopoly on parliamentary control, but in 1994, the LDP formed a coalition with the Socialists and resumed their seat of power in the Diet. The Democratic Party of Japan, composed of several of Ozawa’s splinter parties and the ideological purists excised from the Socialist Party, was the only powerful opposition party to emerge from the struggle (Schlesinger, 284). Although the DPJ and their allies gained power in the latter 1990s, however, they lost overwhelmingly to the LDP in the election of 2005, leaving the Liberal Democratic Party, once again, in near total control of the Japanese government.

The LDP learned from its defeat and, after its return to power, the ruling party initiated a financial restructuring, optimistically called the “Big Bang”, which decommissioned certain banks (such as the Hanwa bank in 1996) over the course of the latter half the 1990s (McCargo, 63). This reform may have helped to ease the economic crisis left by the collapse of the bubble economy, but in a further effort to encourage growth and create jobs, the government began a program of support for the construction industry. This traditional Keynesian approach had worked well in the 60s, but fared less well in the 90s as “this disastrous policy of subsidizing and artificially inflating the construction industry … employed over 6 million workers, many in make-work jobs that could never be sustained” (Kingston, 124). This “construction state” provided jobs, however, especially to rural areas, and the LDP’s long-running practice of defining their policy based solely on what will get votes seems unlikely to stop the concrete wave.

The adaptability of the LDP allowed the party to please a wide range of voters, but undermined the careers of individual MPs, who may find themselves left behind when their party’s policies change underneath them. The greatest of such shifts to occur after 1994 concerned the economic restructuring of the “big bang”, with much of the debate over the manner and timing of the restructuring taking place between two ideological groups within the LDP. The more conservative faction, outspokenly nationalist and heavily reliant upon the backroom business dealings that proved so lucrative in the past, had consistently blocked or slowed the restructuring. On the other side of the spectrum, the liberal faction advocated more rapid restructuring of the Japanese economy.

Beginning in 1998, one of the leaders of the liberal faction, Koizumi Junichiro, successfully wed the two groups together with a mixture of nationalism and vigorous demand for reform. Koizumi pleased the nationalists with avocation for greater mobilization of ‘s military power, as well as several controversial visits to the Yasukuni Shrine, which honors ‘s war fatalities, including war criminals (Kingston, 238). Koizumi also advocated sweeping reforms, including the completion of the “big bang” deregulation program with “no sacred cows” (McCargo, 69). Running his campaign as if he represented a new, progressive movement against the conservative forces in his own party, Koizumi became Prime Minister 2001, and still holds the office (Lecture notes, 9/10). What little success the Prime Minister’s social reforms have enjoyed however, has come at the cost of a major overhaul of the LDP and an emergency reelection in 2005. The nominal fruit of this upheaval, the acceptance of a postal reform bill that will not take affect until 2017, pales in comparison to the actual result of a Japanese government now significantly consolidated under the rule of an LDP purged of opposition factions by the election. Whether the new stronger grip of Koizumi’s interests on Japanese politics will result in a solution to the post-bubble problems remains to be seen.