Why the DPJ should defend Hatoyama

As Japan heads into the final week of the political annus mirabilis that has been 2010 2009, Hatoyama Yukio, the face of political change as the first leader of a party other than the LDP to win a majority in more than a half century, finds himself under siege.

The immediate cause — beyond falling public approval — is Hatoyama's lingering political funds problem. Sankei, the "opposition" newspaper that sometimes appears to be little more than a mouthpiece for the LDP, wonders whether the Hatoyama government is, in the words of an LDP official, in "dangerous waters" as prosecutors assemble the case against two former Hatoyama aides indicted for violations of the political funds control law. On Thursday evening, the prime minister held a press conference on the indictments, taking responsibility for the violations but dismissing calls to resign.

In response to Hatoyama's press conference, Tanigaki Sadakazu, the LDP's president, offered the absurd idea that the prime minister should immediately resign, dissolve the House of Representatives, and call a general election.

What Tanigaki's response tells us is that Hatoyama's problems have little or nothing to do with the LDP. The LDP is no more ready to receive the confidence of the Japanese people today than it was on 30 August — indeed, it may be even less capable of earning the trust of the Japanese public. Hatoyama's problems instead lie with the media, which is capable of offering much more potent resistance to the sitting government than the LDP at this moment in time. "Public opinion" as packaged by Japan's media outlets has long played an outsized role in determining the fate of Japan's prime ministers, the monthly opinion polls conducted by newspapers and TV stations effectively providing an EKG for their governments. The last years of the LDP provided example after example of the power of "public opinion." LDP barons worried more about the sitting cabinet's approval ratings than whether the sitting government was fixing Japan's numerous and multiplying problems. Somehow in their pursuit of "public opinion" the public interest got left behind.

The DPJ was effectively elected on a platform that rejected this approach to politics. Taking its manifesto seriously, the party viewed its electoral victory as a mandate for implementing — or at least trying to implement — its policy proposals. Its manifesto included a four-year timetable for its proposals. In other words, the only register of public opinion that would matter to the DPJ would be the next general election, when the Japanese people would judge the DPJ on its record in office. It would not be obsessed with the month-to-month fluctuations of newspaper opinion polls.

Faced with open speculation about who will replace Hatoyama should he step down in January before the 2010 ordinary Diet session, including speculation that his replacement might be Ozawa Ichiro, whether the DPJ will be able to stay true to this new style of politics will be sorely tested in the coming weeks.

Defending Hatoyama — even to establish a new principle — is less than ideal. His political organization's accounting "irregularities" were known even before the election, and his hold on his own government appears at times to be tenuous, even if I wouldn't go so far as to declare that Ozawa is using Hatoyama as a puppet. (The LDP, drawing upon its own history, has taken to calling the government the "Ohato" government, alluding to the description of Nakasone Yasuhiro's first government as the "Tanakasone" government for the role supposedly played by Tanaka Kakuei in its formation.) And there is a certain political sense in not lashing the party's fortunes to its leader.

But despite these negatives, the DPJ is better off rallying behind the prime minister. To abandon Hatoyama now is to continue to afford the media an extraordinarily powerful role in picking who leads Japan. The DPJ's political reforms do not necessarily call for a presidential-style premier, but to retain the LDP's revolving door at the Kantei would undermine the image of the DPJ's election as signifying genuine political change — and it would invite even more attacks from the media on the government. If the mass media can dog the DPJ into an abandoning a prime minister once, why not a second time? And why stop at changing prime ministers? Why not pressure the government into calling a snap election too? Finally, a change of prime ministers mere months into Hatoyama's term would reinforce the image abroad that Japan is ungovernable, an image which Hatoyama, through his travels during his first months in office, has tried to change.

The Hatoyama government has an opportunity to fight back in the weeks before the ordinary session. With its budget in hand — the cabinet agreed to the 92.3 trillion yen budget for 2010 on Friday — the government can push back against its critics by showing that it is taking the first steps in following through on its campaign promises. It has weeks during which it can defend its choices regarding which promises to maintain (universalistic child allowances, free secondary education) and which promises to scale back (retaining the gasoline surcharge). The LDP is already attacking the budget as a "violation of the manifesto," and criticizing the government for not referring to a consumption tax increase as a way to address mounting social security outlays. The Hatoyama government should take this opportunity to steer public discussion away from the prime minister and back to the policy agenda upon which it was elected.

As Nakasone himself said recently, the government is still in its early stages; it is too soon to expect results. The agenda is bigger than any single politician — Ozawa included — but for the moment the DPJ's success depends on surviving this initial period with the public still behind it. Hatoyama may not last four years in office, but if the DPJ is to show him the door, it should do so on its own terms, and not because the media has dictated that Hatoyama's head should roll sooner rather than later. And if the DPJ can successfully defend Hatoyama from the media in the short term, it may improve Japanese politics over the long term by weakening the ability of media organizations to shape political outcomes.

Winter of discontent?

December has brought little but bad news for the Hatoyama government, which has now been in office for just over three months.

The economy continues to struggle (and deflationary pressure continues to grow), US officials are displeased over the government's decision to delay on Futenma, and polls show the public souring on the new government.

Two recent polls show that the Hatoyama government's approval rating has fallen below 50%. Asahi's poll recorded a fourteen-point drop in the government's approval rating, from 62% to 48%, with its disapproval rating rising from 21% to 34%. The biggest blow to the government's approval came from independents. The poll found disenchantment with Hatoyama Yukio's leadership — and 60% disapproved of the government's handling of the Futenma dispute. The Asahi poll is not all bad news: the DPJ continues to enjoy considerable support, 42% of respondents to the LDP's 18% (the DPJ's support fell four, the LDP's rose four).

Jiji's poll found the government's approval rating fell more than seven points to 47%, with respondents similarly voicing their disenchantment at the prime minister's leadership. In Mainichi's poll, the government is still above fifty percent approval, but its support fell nine points to 55% — and nearly 70% of respondents said that they were "worried" about the government's approach to the US. The DPJ continued to hold a wide advantage over the LDP in the Mainichi poll.

One more poll number is worth mentioning: the Jiji poll asked respondents who they think is the most influential actor in the government. 71% said Ozawa Ichiro. Hatoyama was second, with 10%.

Back in September, the day before the Hatoyama government took power, I listed what I thought were the strengths and vulnerabilities of the Hatoyama government. In the latter category, I listed Hatoyama, Ozawa, and the media. I anticipated that the combination of these vulnerabilities could produce a vicious cycle that could unravel the government. In these figures I wonder whether that is exactly what we are seeing. I do not think that Ozawa is actually the most important figure in the government. What the 71% figure tells us is that the media has succeeded in constructing a narrative that shows Ozawa as the most influential figure in the government. After all, a poll question on who respondents think is the most influential figure in the government is asking respondents not what they think of some policy question that has some bearing on their lives but what they've heard on TV or read in newspapers. Naturally with articles like this one from Sankei — "Mr. Ozawa's leadership gaining strength — 'Government Unification' becoming a dead letter" (referring to unifying cabinet and ruling party) — the Japanese public might get the idea that Ozawa is considerably more significant than the prime minister.

The latest concerns about Ozawa are the result of a dispute between Ozawa and the prime minister over the 2010 budget. Aware of the need to control spending, especially with this year's tax revenues falling below 40 trillion yen for the first time since 1985 even as debt issuances increased to 53.5 trillion yen, the government and the DPJ are debating how to modify the party's election promises. The government will try to limit new debt issuances to 44 trillion yen next year, which, barring a massive and unlikely increase of tax revenue, means that the party will have to scale back its spending plans. Naturally Ozawa and the government have different opinions on what should be scaled back.

The DPJ — i.e. Ozawa — has submitted a proposal to the government for what the budget should look like. On the spending side, the plan calls for, among other things, introducing a 13,000 yen/month child allowance in the first fiscal year of the program, ending fees for public high schools, introducing income support for farmers, and paying out new subsidies for local governments. On the revenue side, it includes proposals to increase fees for medical services, retain the temporary gasoline surcharge but cut the automobile weight tax, change the highway toll system gradually, and begin investigating an environment tax. Combined with Ozawa's intervention with the Imperial Household Agency to secure a meeting between the Emperor and Xi Jinping, the Chinese vice president reputed to be Hu Jintao's likely successor, Ozawa appears to be inordinately powerful as a policymaker.

But his influence has, I think, been overstated, in part because the media has wanted to treat Ozawa as the government's "shadow shogun" from the moment Ozawa passed the reins to Hatoyama, in part because the media's expectations concerning the unification of cabinet and ruling party are unrealistic.

Regarding the former, Ozawa simply overshadows every other DPJ politician, Hatoyama included — although when I say overshadow, I do not mean overshadow in terms of influence. Rather everything Ozawa says or does is dissected by the media. He is charismatic in his way, has interesting things to say when asked, and is always good for headlines, very different from Hatoyama in these respects. Hatoyama is a bit professorial, and, well, boring. And now that he is prime minister, he has to be careful with his words in a way that Ozawa, not holding a cabinet post, does not have to be.

As a result, Ozawa looks and sounds influential. But that does not make it so. There was never going to be a way to completely silence Ozawa or to entirely subordinate the ruling party to the cabinet. Ozawa, guardian of the party's majority and therefore its electoral prospects, was never going to be completely silent on policy, at least insofar as the government's policy decisions affect the party's political outlook. The question is whether political considerations are considered as one concern among several in cabinet deliberations or whether they are the dominant concern. It is at this point that I part ways with the press. I do not think that Ozawa is issuing marching orders to the government. In fact, I think the reports of mutual displeasure may be signs of the limits of Ozawa's influence. Ozawa has suggested some ways of trimming the party's manifesto that he thinks maximizes the party's chances in the next year's upper house election. Others will disagree. Ozawa himself has said that the final decision belongs to the government. Will he accept that decision without complaint?

In fact, this debate over Ozawa's influence obscures the fact that we are talking about one man. Under the LDP we could not have this debate because it was not just one man in the LDP who wielded a veto but a vast network of committees and subcommittees in PARC, faction leaders, the election strategists, and the party elders in the general council. As troublesome as Ozawa can be, is he more meddlesome than the LDP's policymaking system, when a debate of this nature would mean input from every committee chair or subcommittee chair with the slightest interest in the forthcoming budget (i.e., everyone)? A single veto player can be overruled or coaxed into cooperation. The same could not be said for the LDP's policymaking system. Any discussion of Ozawa's role must keep sight of the alternatives.

Ultimately these developments reinforce the idea that there was no way to completely neutralize Ozawa's negative influence on the Hatoyama government. And the bigger problem — as the opinion polls suggest — may be Hatoyama and not Ozawa. As in the case of Kamei Shizuka in the early days of the Hatoyama cabinet, Hatoyama has allowed a political vacuum to form and allowed someone else to fill it, in this case Ozawa. Hatoyama has won a small victory, with the Tokyo prosecutor's office announcing that it will not seek to indict the prime minister, but he has bigger problems. Can he show enough backbone to dispel the impression that he cannot lead his own government?

The public has not abandoned the DPJ yet. But it needs some sign that the prime minister is actually in control of his own government. Disagreements and discussion among cabinet ministers — and between Ozawa and the government — are acceptable, as long as Hatoyama is able to make clear that the final word truly is his. He needs to inject his voice into the debate more. We need to hear more of what he thinks. Otherwise Ozawa's outsized personality will continue to dominate the public image of the government, the media will continue to feast on the disorder, and the Hatoyama government's approval rating will continue to fall. The Hatoyama government is perilously close to the vicious cycle that I feared would endanger the government from the start.

The DPJ's quiet revolution

In a contribution to Foreign Policy's "Think Again" feature, Paul Scalise and Devin Stewart maintain that the DPJ victory will result in "the same old stagnation in Tokyo." While there are points worth considering in their piece — especially on foreign policy and the notion that the DPJ is "anti-capitalist" — on the whole Scalise and Stewart, far from offering new thinking about the DPJ, offer the same old cliches about the DPJ's policy priorities and its internal dynamics. [For the record, I know them both — indeed, Scalise and I have argued many of these points in person.]

First, they argue DPJ politicians are not revolutionary: "Like those of the long-reigning Liberal Democratic Party (LDP), they are political opportunists without any long-standing ideological position or dominant constituency. Their only common desire is to be elected." They repeat the standard claim that "many members of the DPJ leadership were at one point members of the LDP," implying that the presence of former LDP members in the DPJ means that the party couldn't possibly stand for change. (Because apparently the most important fact about Ozawa Ichiro and Hatoyama Yukio, among others, is that they began their careers in the LDP, not that they spent nearly the past two decades trying to destroy LDP rule and usher in a new style of politics.)

This argument also ignores the fact that the party's candidates were remarkably unified behind the DPJ's manifesto during the general election. Far from being "political opportunists," the bulk of the DPJ's newly elected members are true believers in the party's agenda, which can be simplified as "Seikatsu dai-ichi" (Livelihoods first, i.e. pensions reform, building a new safety net, etc.) and "Seiken kotai" (regime change, mainly changing the relationship between politicians and bureaucrats in Tokyo, decentralizing the government, etc.). The point is that the DPJ has a remarkably clear agenda, which enjoys the support of the party's Diet members. Indeed, as Michael Cucek, the no longer anonymous author of Shisaku, worried before the election, the problem may be that the party members are too loyal to the agenda and not opportunistic enough. The opinions of DPJ backbenchers, however, may not matter much one way or another (more on this momentarily). The politicians in the cabinet — the DPJ politicians who do matter — are not mere opportunists, but they are not naive idealists either. The standard caricature of the DPJ and its leaders is simply wrong.

And in any case, the DPJ does not need to be "revolutionary" to deliver meaningful change to how Japan is governed.

Second, they express dismay that the DPJ is not the party of economic reform. Perhaps this is the case, although they make the same mistake that they criticize the media for making: they treat "economic reform" as an "empty buzzword," as nowhere in this section do they bother to define what they mean by economic reform. Surely there is no single way for Japan to reform, beyond the broad idea that Japan ought to transition to a more balanced model of economic growth, as I recently discussed here. There is not a single path to a new Japanese model, and as with any major institutional change, it will entail bargaining and compromises among various social actors.

Scalise and Stewart expect a new economic system to emerge in the manner similar to Koizumi Junichiro's style of reform: "Were the DPJ to change this system, it would need to bolster party unity, appeal to progressive constituencies with a transformative economic plan, and then gin up grass-roots support." One, as I have already noted, the DPJ is as unified as it is going to get, and is certainly more unified than the LDP probably ever was when it was in government. And in the event that DPJ backbenchers disagree with government plans, administrative changes already implemented will make it difficult for them to register their disagreement (see the subsequent section for more on this). Second, I'm not quite clear what they mean by "progressive constituencies." Consumer groups? Activist groups? Foreign investors? Who exactly do they mean?

Finally, they anticipate a lack of reform due to the structure of the DPJ — and its "bickering," "fragmented," "hodgepodge" coalition government indebted "to many masters" — and not, as I argued the other day, the fact that transforming an economic system is challenging in the best of times, and even more challenging in light of the LDP's having left the new government with a gross debt/GDP ratio now in excess of 200% and the global economy's recovering from a historic crisis. The obstacles facing the new government are without question considerable, but far from being hindered by a divided, bickering party and government, Hatoyama and his senior ministers have taken a number of steps that should give the DPJ-led government a fighting chance of succeeding in changing the Japanese economy for the better. The government may well fail, but it won't fail because of irreconcilable divisions within the cabinet. Indeed, what Scalise and Stewart see as "heated internal bickering" (a code word for Kamei Shizuka) I see as a massive step forward: note that the bickering is internal not to the ruling party or between ruling party and cabinet as under the LDP, the debate is occurring within the cabinet, among cabinet ministers. Cabinet ministers are actually debating what the government's policy should be! They're not just signing off on some document handed to them by administrative vice ministers or the party general council! What they see as bickering I see as a feature, not a bug. No government in the world — no democratic government anyway — is characterized by perfect unanimity among its leaders. The question is how the system manages disagreements and whether it is capable of making decisions and following through on them. The LDP system failed in large part because disagreements crossed institutional lines, undermining the cabinet's ability to establish policy priorities and lead.

Which brings me to the biggest flaw in their argument: they completely misunderstand the nature of the changes proposed by the DPJ when it comes to the relationship between politicians and bureaucrats. In describing the system of LDP rule, they see bureaucratic dominance as the result of the failings of Diet members, not the result of the institutional weakness of the cabinet relative to the LDP's internal organs (most notably the policy research council) and the bureaucracy itself: "...Politicians lack the time, energy, staff, and expertise necessary to write bills."

Undoubtedly individual backbenchers have had few resources of their own — but again, they ignore the power LDP backbenchers were able to wield as members of the PRC, working in cooperation with bureaucrats against the cabinet. But the answer to making Japan's government more effective is not strengthening the power and expertise of individual backbenchers. Indeed, the answer lies is ensuring that backbenchers have fewer avenues to exercise influence while concentrating all policymaking power in the cabinet.

Which is precisely what the DPJ plans to do. Scalise and Stewart don't seem to appreciate the significance of what the Hatoyama government has done in just the first few weeks of power: "The ruling party has called for the creation of a few smaller cabinet-focused committees to replace a few older party-centric and ministry-centric committees. It has also restricted the media's access to the bureaucracy -- hardly signaling its commitment to a more democratic and transparent legislative process."

What they miss here is just how powerful an actor the "party-centric" committees — the LDP's PRC — was in the policymaking process and how having powerful policymaking institutions outside the cabinet prevented it from controlling the policymaking process. And the idea that replacing bureaucratic press conferences with press conferences by political appointees is somehow undemocratic is laughable, and is indeed intended to ensure that the government's policy message is conveyed to the public clearly by the officials responsible for drafting it.

Scalise and Stewart simply miss the idea that the DPJ is trying to implement a Westminster system in Japan — and they simply miss just how radical an idea this is when one considers it in contrast to the LDP's "un-Westminster" system of government, in which the ruling party and its organs, together with the bureaucracy, had extensive veto power over the cabinet. The DPJ is trying to create a cabinet-led system of government that will be able to attempt some of the reforms desired by Scalise and Stewart, reforms that LDP-led cabinets struggled to maneuver through a cumbersome policymaking progress laden with veto points. At the very least the DPJ is creating a system of government that will be capable of experimentation and government by trial and error, which, after two lost decades, may be the only way for Japan to get a new economic system.

So what do we know about the DPJ's system of government so far?

Quite a lot, actually, because in its first days in office the Hatoyama government stated precisely how it plans to govern.

First, the DPJ as a ruling party is weak and — unlike the LDP — has no formal role in the policymaking process. The DPJ's policy research council has closed up shop; policy coordination will be managed by a national strategy bureau attached by the cabinet and headed by Kan Naoto, deputy prime minister and one of the DPJ's most senior politicians. Ozawa, the new DPJ secretary-general, has been given tremendous power over the ruling party and its Diet majority, making him the essential figure for getting the cabinet's policies passed into law.

Indeed, Ozawa will perform a function essential to a Westminster system: his job will be to ensure that the cabinet has the confidence of the ruling party, through which it controls parliament. Ozawa is hard at work on ensuring that backbenchers follow his lead, and by extension the lead of the cabinet. Far from strengthening the power of backbenchers, which Scalise and Stewart for some reason see as essential to changing how the government works, the DPJ intends to reform the system so that the job of a DPJ backbencher is to receive instructions on how to vote from Ozawa, show up to vote at the right time, and take the necessary steps to get reelected and so preserve the government's majority. Unlike under LDP rule, when backbenchers were busy with endless party committee and subcommittee meetings, participation in which being essential for getting ahead in the party, the cabinet and the party leadership expect that DPJ backbenchers will be seen and not heard.

To make this point absolutely clear, the DPJ has informed its Diet members that legislation introduced by Diet members (as opposed to legislation introduced by the cabinet) will be banned "in principle," with exceptions made for legislation related to elections and "political activities." (Presumably the latter exceptions will enable Ozawa to move legislation related to liberalizing campaign activities, long one of his pet issues and the subject of his recent study trip to Britain.) Also while in Britain Ozawa studied the daily activities of parliamentarians — in other words, what backbenchers do with their time since they have little to do when it comes to policymaking.

Beyond these changes, perhaps the biggest oversight on the part of Scalise and Stewart is their failure to appreciate the radicalism of the DPJ's changes to the budgeting process. As I argued before the general election, the DPJ's idea of "regime change" cannot be understood without looking at its plans for the budgeting process. In their plans to transfer budgetary authority to the cabinet — which, after all, is given budgetary authority by the constitution — the DPJ is positioning itself to deliver a democratic revolution in Japan by enabling political leaders to determine how the public's money is spent, and to redirect funds in the direction of policy priorities desired by voters.

The Hatoyama government has already taken the first steps towards a new budgeting process. Just as it said it would, on Tuesday the cabinet approved a cabinet decision that canceled the Aso government's budgetary guidelines, instructed cabinet ministers to establish budget priorities from a "zero base" and to make substantial cuts to the extent possible, and stressed once again (as the DPJ did in its manifesto) that the government will be redoing the budget from scratch. It will not simply make incremental adjustments to last year's budget. At the same time, under the leadership of Furukawa Motohisa, deputy minister for the new national strategy office and the administrative renovation council, the Hatoyama government will devise a framework for next year's outlook for tax revenues and bond issues, a job in recent years done by the Council on Fiscal and Economic Policy (replaced by the NSO), but, as Asahi notes, "The finance ministry decided the specific size of the budget." The NSO will be taking the lead in all facets of the budgeting process. We will know more about the new budgeting process after 15 October, the new deadline for ministries to submit requests to the cabinet.

There are plenty of questions about how the NSO, the new budgetary process, and the new policymaking process more generally will work, but Scalise and Stewart miss several key points that suggest not only does the new government have radical ideas for the policymaking process, but also will likely succeed in making the government more top-down, more cabinet-centered, and more streamlined than any of its predecessors: (1) the Hatoyama government has clear ideas for how it wants to change the system of government (indeed clearer ideas here than in any other policy area), (2) relatedly, its members have spent years studying the LDP's failures, the failures of the Hosokawa government (in which several Hatoyama cabinet members participated, including Hatoyama himself), and of course the British system, (3) there is more public support on this issue than any other, as public opinion polls have shown overwhelming support for the DPJ's plans to redraw the relationship between politicians and bureaucrats, especially concerning budgeting, and (4) the bureaucracy is not nearly as opposed to the DPJ's plans as one might expect. Kan, for example, has been reaching out to reformist bureaucrats. The finance ministry, far from standing in the new government's way, accommodated the DPJ's request to hold off on budgeting for 2010 despite the ministry's desire to stick to the customary schedule. Spending ministries, the targets of the DPJ's desire to cut waste, have softened their once vocal opposition to the new government. They may yet attempt to derail the government through sabotage or foot-dragging, but there are enough reports out there of bureaucrats eager for political leadership to suggest that it is far too early to write off the DPJ's administrative reforms as doomed.

In short, the changes set in motion by the Hatoyama government will likely result in a stronger cabinet actually capable of leading Japan, and by leading I mean making difficult decisions instead of punting on every decision as the LDP did when in power. A new policymaking process is no guarantee of success, but the Hatoyama government is taking the right steps to give it a chance to change Japan for the better. It may not look like much of a revolution, but a quiet revolution is still a revolution.

The Hatoyama government fills more positions and gets to work

On Friday the Hatoyama cabinet met and continued its work of reforming Japan's policymaking system.

The cabinet decided to create the national strategy office under the leadership of Kan Naoto, pending legislation to elevate the office to a full bureau attached to the cabinet. Another cabinet decision created the Administrative Renovation Council (ARC), which will nominally be headed by Prime Minister Hatoyama Yukio but will be managed by Sengoku Yoshito, a cabinet-level minister. Discussing the NSO, Kan stressed its role in economic planning and fiscal policy, and said the office's role would be controlling the "planning, drafting, and synthesis of the cabinet's important policies." The ARC's role is less clear, having some as-yet-undefined role in the budgeting process.

Another important but relatively unheralded institutional reform was announced on Thursday. As stressed by Kan in his July Chuo Koron essay — seriously, read it if you haven't read it yet, it's essential to understanding the DPJ's thinking as it reorganizes the government (I discussed it here) — essential to making the cabinet more dynamic is conducting its work in cabinet committees dealing with specific issue areas. Most significantly, the government announced that among the first cabinet committees would be a budget committee, an institutional feature of the Westminster system singled out for praise by Kan. The budget committee's members will be Kan, Fujii Hirohisa, the finance minister, Sengoku, and Chief Cabinet Secretary Hirano Hirofumi. The government will also create an environment committee composed of Hirano, Foreign Minister Okada Katsuya, METI Minister Naoshima Masayuki, and Environment Minister Ozawa Sakihito. It is unclear precisely how these cabinet committees will interact with the cabinet as a whole, but they should help streamline the policymaking process.

Naturally creating the budget committee — in addition to setting up the NSO, of course — is essential as the Hatoyama government prepares to redraw the budget. On Thursday Fujii stressed that the government would be taking a scalpel to "hothouses of LDP interests." Fujii introduced another approach the government would take to raising revenue in addition to cutting waste: it would investigate the efficiency of the special measures law on taxation. Fujii said the government would draft a law calling for an investigation by the Diet and the Board of Audit into the law, with an eye towards rationalizing it and possibly widening the tax base by closing tax loopholes that have favored certain corporations. As Sankei notes, closing loopholes would not only secure new sources of revenue for the government, it would also shed light on the relationship among politicians, bureaucrats, and interest groups under LDP rule (politically convenient in advance of next year's upper house election).

In Friday's cabinet meeting, meanwhile, the government issued a cabinet decision officially suspending a portion of the Aso government's stimulus package. The goal is to redirect roughly 3 trillion yen to next year's budget to pay for DPJ programs included in the manifesto.

The government has also announced its twenty-two parliamentary vice ministers, as well as the vice minister serving under Kan at the NSO. In this last position the cabinet named Furukawa Motohisa, a former finance ministry official and one of the DPJ's rising stars. Furukawa's appointment to the NSO reinforces the idea that its primary task will be taking control of the budgeting process. Joining Furukawa at the cabinet office will be Oshima Atsushi, a four-term lower-house member from Saitama, and Ootsuka Kohei, a two-term upper house member from Aichi who previously worked for the Bank of Japan, has written extensively on the Japanese economy, and has earned respect in the Diet for his expertise. It bears noting that these three appointees have spent their entire careers as DPJ members.

The same applies to the ministry of internal affairs and communications, the vice ministers of which will be Watanabe Shu, a five-term lower house member from Shizuoka, and Naito Masamitsu, a two-term upper house member from Tokyo; the justice ministry, where Kato Koichi, a four-term lower house member from Tokyo and former shadow vice justice minister, has been appointed vice minister; the foreign ministry, where Takemasa Koichi, a four-term lower house member from Saitama who is close to Noda Yoshihiko (also from Saitama), and Fukuyama Tetsuro, a two-term upper house member from Kyoto in the Maehara group (Maehara is also from Kyoto), will be the vice ministers; the environment ministry, whose vice minister will be Tajima Issei, a three-term lower house member; and the defense ministry, the vice minister of which will be two-term upper house member from Shizuoka Shinba Kazuya.

The remaining ministries are more mixed. Neither vice minister of finance — Noda and Minezaki Naoki — began his career in the DPJ (Noda in the Japan New Party, Minezaki in the Socialist Party). In the education ministry, former shadow finance minister Nakagawa Masaharu began his career as a New Frontier Party member but has been in the DPJ since its second creation in 1998 — and he is joined by Tokyo upper house member Suzuki Kan, who has belonged only to the DPJ. In the health, labor, and welfare ministry, neither Hosokawa Ritsuo nor Nagahama Hiroyuki began their careers in the DPJ (Socialist Party and Japan New Party respectively). In the agriculture ministry, Yamada Masahiko, who began his career in Ozawa Ichiro's Japan Renewal Party is balanced by DPJ-only upper house member Gunji Akira. Neither vice minister at METI is DPJ-only: Matsushita Tadahiro is a PNP member and was first elected as an LDP member in the auspicious election of 1993, Mashiko Teruhiko won two lower house terms as an LDP member in the early 1990s, defected, and eventually wound up in the DPJ and is now an upper house member from Fukushima. The vice ministerships at the land ministry are split between SDPJ member Tsujimoto Kiyomi and career DPJ member Mabuchi Sumio.

The point of investigating the backgrounds of the vice ministers is to show that even if the ministers picked their own vice ministers — as the DPJ said — the ministers may have been picking from a subset of potential appointees and may have had some restrictions. In ministries with two vice ministers, the two posts are split between members of the two houses — and in all but one case the upper house member last won reelection in 2007 and will therefore not have to worry about campaigning for the 2010 upper house election. Meanwhile, the point of identifying sub-cabinet members who have spent their entire careers in the DPJ is simply to show that the DPJ has been cultivating young talent and is not simply composed of outcasts from other parties. In the cases of Furukawa, Watanabe, Nakagawa, and a few others, these are rising DPJ members expected to vie for the party leadership in the future. (Richard Samuels and Patrick Boyd included both Nakagawa and Watanabe on a short list of DPJ future leaders in their article "Prosperity's Children.")

As this expanding Hatoyama government sets to work, it can for the time being count on the support of the public. Asahi's first public opinion poll found 71% approval for the new government. Moreover, 52% of respondents said they approved of the cabinet lineup, compared with only 14% who disapproved. When it came to policy, respondents approved of child allowances 60% to 30%; disapproved of lifting tolls on public highways 67% to 24% (little surprise that Maehara Seiji pledged prudence on this matter); supported the DPJ's plan to unify the pensions system and establish a 70,000 yen monthly minimum for pensions by 75% to 16%; and approved of lifting the gasoline surcharge 56% to 30%. Asked whether the DPJ could cut waste, 61% said yes, 26% said no. Respondents were slightly in favor of Ozawa's serving as secretary general, and overwhelmingly approved of the statement that the government should take the PNP's and SDPJ's opinions into consideration whenever possible, 61% to 31%.

Mainichi found similar support: 77% approval for the new cabinet, second only to Koizumi Junichiro's first cabinet. 68% were hopeful regarding Hatoyama's cabinet picks. Yomiuri recorded 75% approval, also second only to the first Koizumi cabinet's. (Yomiuri's poll also found 69% of respondents unconvinced by Hatoyama's explanation of his campaign finance problem.)

Even the DPJ's most intractable opponent within the bureaucracy is coming around. Ichide Michio, the administrative vice minister of agriculture, forestry, and fisheries, no doubt fearing for his job, said that he accepts the leadership of Akamatsu Hirotaka, the new minister, who chastized Ichide for his past remarks critical of the DPJ's plans.

I call attention to these data points not because they guarantee the Hatoyama government's success, but because they show that in the early going everything is working in the new government's favor. The Hatoyama government has set itself up to succeed; the prime minister chose wisely in picking his cabinet ministers. But now the question is how the cabinet will proceed and whether it will be able to hold itself together as it moves an agenda through the Diet. There is already at least one hint of trouble (aside from the Ozawa question): Kamei Shizuka, whose portfolio includes the "postal issue," declared at a press conference following the cabinet meeting Friday that responsibility for the issue was his, not Haraguchi Kazuhiro's, the minister of internal affairs and communications.

Apologies to Ikeda Nobuo, as it took less than three days for Kamei to start trouble in the cabinet. Giving Kamei a portfolio but no administrative role for postal privatization was clearly going to be a source of conflict. It is not beyond managing — how about a cabinet committee? — but resolving this turf battle will be Hatoyama's first act of arbitration as the committee chairman prime minister. Clearly the downside of a team of rivals is that rivals fight from time to time, requiring management by the man in charge.

As Japan heads into Silver Week, the Hatoyama government's standing could not be better. But now it will have to sort out the budget and have its legislation ready for the Diet session scheduled to open in late October.

The first day of the new era in Japanese politics

The DPJ wasted no time following the election of Hatoyama Yukio as prime minister Wednesday.

His cabinet lineup established, the DPJ-led government immediately set to work establishing a new relationship between the cabinet, DPJ backbenchers, and the bureaucracy.

Regarding the DPJ, its internal organizations, and its numerous backbenchers, the new government announced several measures to strip the DPJ of any policymaking role. On Wednesday morning Fujii Hirohisa, the new finance minister, reiterated an earlier pledge to abolish the party's tax commission and bolster the government's tax commission, reversing the situation that prevailed under the LDP. More significantly, the DPJ dissolved its policy research council completely. Contrary to earlier plans, Kan Naoto won't even carry the title of chair of the policy research council, because Ozawa Ichiro does not want cabinet members serving simultaneously in party posts. This single measure is a radical departure from LDP rule, under which the policy research council served as a shadow government, complete with committees and subcommittees mirroring the bureaus and offices of the bureaucracy. If bureaucrats wish to consult with politicians on policy, they'll have to go through cabinet ministers and the national strategy bureau.

The new government immediately established new regulations governing contact between bureaucrats and politicians not holding cabinet or sub-cabinet appointments. The regulations will require to bureaucrats to make the contents of all requests from Diet members known to their ministers — and bans, in principle, efforts by bureaucrats to influence Diet members. Abolishing the policy research council will close off an important avenue of influence under LDP governments. The government has also mandated that bureaucrats save records related to requests for subsidies, licenses, contracts, and the like from backbenchers and their secretaries.

Regarding the bureaucracy, the DPJ has made clear that it intends to constrain bureaucrats' activities. In particular, the DPJ plans to restrict media access to the bureaucracy, based on the idea that the cabinet is making policy and setting priorities and so its members should be responsible for explaining policies to the press, not the bureaucrats whose job is to execute the cabinet's policies. Discussing this proposal last week, Okada Katsuya naturally cited the British example: permanent secretaries in Whitehall do not give press conferences. Instead the government issued a new policy Wednesday. Political appointees in ministries will be responsible for communicating ministry policy to the media, and regular administrative vice ministerial press conferences are abolished. (To centralize explanations of the government's policies, the Hatoyama government ought to create a press secretary's office.) Naturally journalists have complained about this change.

The DPJ will also abolish the administrative vice ministers' council, which for 123 years has enabled bureaucrats to manage the work of the cabinet, as conservative newspapers did not fail to note in their reporting on its final meeting Monday. Bureaucrats will still meet amongst themselves, of course, but dissolving the council will strip them of a customary and powerful role in the policymaking process, hammering out disagreements across ministries before cabinet meetings.

The thinking underlying this framework can be found in a document released by the cabinet Wednesday. The document stresses that changing the balance of power between politicians and bureaucrats in favor of political leadership is essential to realizing "true democracy." This document is not a declaration of war on the bureaucracy as an institution. It is a constitutional document that aspires to restore constitutional government by ending the delegation of substantial powers from the cabinet to the bureaucracy. The second and third parts of the document contain most of the aforementioned regulations, but the first part explains the proper relationship between political leaders and bureaucrats, and the relationship of both with the public.

The role of politicians sent into ministries, the cabinet declared, is to command and supervise the work of officials on behalf of the public. Bureaucrats, meanwhile, are public servants — not a word regularly used to describe Japanese officialdom — and they are to implement the policies established by the public's representatives in government. They are to provide data to political leaders, present options for policies, and assist political leaders in the execution of their duties. The document stresses a division of labor between political leaders and officials: each should respect the other's responsibilities.

Ultimately these new regulations provide only a framework. It will take time for these principles to reshape the relationship in reality, time for bureaucrats to accept the leadership of politicians they may view as inferior, perhaps time even for politicians to accept that they are in fact the masters of the bureaucracy. Like any revolution, the DPJ's revolution in governance will entail a revolution in the mindsets of both politicians and bureaucrats.

But the Hatoyama government did not just outline a new framework for the relationship between politicians and bureaucrats on its first day in office. Its cabinet ministers hastened to set goals for the first weeks and months in office.

• Regarding the 2010 budget, Fujii stated that the government would decide upon a plan for the 2010 budgeting process by the beginning of October. The government will abandon the ceiling for budgetary requests established by the Aso government and start from scratch and hasten to find ways to save money in order to budget for programs promised by the DPJ during the campaign, such as monthly child allowances. In order to free up funds for next year's budget, the government plans to halt the Aso government's stimulus programs. The finance ministry informed the DPJ last week that it may be possible to recover nearly 6 trillion yen in funds that have yet to be distributed. Indeed, it turns out that more than half the budgeted funds have yet to be distributed. Tango Yasutake, the administrative vice minister of finance, indicated the ministry's support for cutting stimulus funds earlier this week, suggesting that as the Hatoyama government begins work it is already building a working relationship with the finance ministry.

• A critical player in drafting the new budget will be the national strategy bureau, the creation of which (or, its predecessor, the national strategy office, pending revision of the cabinet law) was one of the new government's first acts on Wednesday. Still no word, however, on who will be working under bureau chief Kan Naoto. Continuing on his theme of choice, Kan stressed that a cabinet budget committee will be created soon.

• Okada Katsuya, the new foreign minister, also made several key policy statements Wednesday. First, he instructed the ministry to investigate the circumstances surrounding the "secret" US-Japan agreement on the introduction of US nuclear weapons into Japan, with a goal of having the report ready by the end of November. He also stressed that he will take a flexible approach to the resolution of the Futenma issue.

• Relatedly, Kitazawa Toshimi, the new defense minister, said Wednesday that Japan will not be continuing its refueling mission in the Indian Ocean beyond the expiration of the enabling law in January.
  

Interestingly, as the Hatoyama government set to work, the LDP's Nakagawa Hidenao, who during the campaign said that preventing the DPJ from taking power was necessary to save Japan, wrote at his blog that the LDP ought to cooperate with the government as the new government works to shift power from the bureaucracy to the cabinet. He said that the LDP should in particular cooperate with the government to pass the legislation establishing the national strategy bureau. It seems that Nakagawa finally realizes that the DPJ is no less serious than Nakagawa and other LDP reformists about changing Japanese governance — indeed, arguably the DPJ's leaders are even more serious and have more comprehensive plans than anything LDP governments have offered in the way of administrative reform.

A new era in Japanese politics has truly begun.

The DPJ begins work on regime change

In a remarkable coincidence, the day after the DPJ's victory in the general election — and the day the DPJ began its transition in earnest — was the same day that ministries and agencies submitted their spending requests to the ministry of finance for the Fiscal 2010 general account budget.

The requests totaled roughly 92.13 trillion yen, a 3.58 trillion yen increase over the 2009 general account budget, making it the first over 90 trillion yen. Of the total, 52.67 trillion yen are general expenditures, with most of the remainder going to servicing Japan's national debt and regional subsidies.

Tango Yasutake, the finance ministry's administrative vice minister, stressed the ministry's desire to complete the budget within the calendar year, as is customary. The reason for Tango's emphasizing the ministry's desire is of course because the DPJ, still a few weeks from taking power, wants to halt the process immediately due to its desire to rearrange the budget completely, for the sake of introducing political leadership into the budgeting process and ensuring that programs from the DPJ's manifesto are included in a DPJ government's first budget as per the timeline included in the manifesto.

DPJ leader Hatoyama Yukio has stressed that the DPJ wants to change the budget completely, as the budget does not reflect its desires whatsoever. Apparently Kawamura Takeo, the outgoing chief cabinet secretary, did not get the message sent by the Japanese people on Sunday: Kawamura said Tuesday that because the requests include measures related to economic stimulus, the DPJ should give serious consideration to the requests as they stand. His colleagues also seemed to miss the point of Sunday's election. Ishiba Shigeru, the outgoing agriculture minister, and Kaneko Kazuyoshi, the outgoing transport minister, used the occasion of the post-election cabinet meeting Tuesday to criticize DPJ programs and demand that the DPJ leave programs untouched.

This is the first battle in the DPJ's fight to change how Japan is governed, and it should win: Asahi reports that the finance ministry is trying to exclude obligatory organizational expenses from the DPJ's desire to reshape the budget in its image. Presumably that leaves plenty of room for the DPJ to fix the budget as it desires. In this fight, the timing of the election may have been fortuitous. The bureaucracy is now facing the DPJ fresh from the high of its historic victory, with possibilities for the new ruling party that presumably won't exist once the DPJ moves into government and gets bogged down in governing.

But at the same time, the process would go smoother if the DPJ were to assemble its cabinet lineup sooner rather than later. Despite earlier indications that a victorious DPJ would name the appointees for senior cabinet posts within the first week after a general election — as indicated in the transition plan which according to Asahi is more associated with Okada Katsuya than Hatoyama — Hatoyama said Monday that he would not name a handful of senior appointees before naming the entire cabinet. The whole cabinet will be named after Hatoyama is elected prime minister. It also seems that Hatoyama may be wavering on his desire to appoint only elected officials to leading cabinet posts as he realizes how inexperienced his own party's members are. I strongly disagree with the decision to delay filling the most senior positions early. The transition would presumably go more smoothly with the government's core in place immediately, with the ministers-in-waiting getting their own teams in place and beginning to meet with senior bureaucrats in the ministries. The transition period is critical for the Hatoyama government's proposed national strategy office, which will have a major role to play despite not existing yet. After all, the NSO will be responsible for remaking the budget along lines desired by the DPJ — a point reinforced by Hatoyama's comment that the posts of NSO chief and the finance minister will be stressed jointly. To smooth the transition, the NSO in particular ought to be staffed as soon as possible.

Meanwhile, the press continues to report that Fujii Hirohisa will have a central role in the new government and that he will likely be joined by Kan, Okada, and Naoshima Masayuki, currently the DPJ's policy chief. Again, why wait if it is increasingly clear who will be occupying the leading posts? Filling these positions now would also take a bit of pressure off of Hatoyama — and would help move from abstract, campaign-style pronouncements as in Hatoyama's press conference Monday.

The bureaucracy itself is making its preparations for its new political masters. Bureaucrats have already delivered copies of budget requests to the offices of DPJ incumbents. For the first time, Yomiuri reports, DPJ members' offices are being visited by bureaucrats, in droves, whether or not the Diet members are present. Meishi are being left in mailboxes by bureau chiefs and other officials at levels never encountered by many DPJ members.

But the battle lines are also being drawn. As I argued in my earlier post on the importance of budgeting for the DPJ (previously linked to in this post), the DPJ's battle for budgetary authority will be waged more with spending ministries than with the finance ministry. Chief among them will be the ministry of land, infrastructure, transport and tourism (MLITT — haven't since this acronym, but why not?) and the ministry of agriculture, forestry, and fisheries (MAFF), the ministries with the most to lose from the DPJ's economy drive. Naturally MLITT's budget request was just about at the budgetary ceiling set by the CEFP. It appears that while MLITT has suggested that it might be open to revising its request, the ministry and the DPJ could clash over the construction of Yanba dam in Gunma prefecture and Kawabegawa Dam in Kumamoto — the DPJ called for the cancellation of both projects in its manifesto, meaning that the DPJ will fight that much harder to ensure that they are expunged from the budget. The DPJ's goal is cut 1.3 trillion yen in public works over four years (which, incidentally, shows how much Japan has already cut public works).

MAFF's request, meanwhile, was a 15% increase over last year's budget, an increase that includes a 19% increase in the ministry's public works spending.

MLITT, having shown conciliatory signs to the DPJ and having become accustomed to shrinking budgets, may find a way to accommodate itself to the new regime. Taniguchi Hiroaki, its administrative vice minister, requested a meeting with Hatoyama, a bit later than his colleagues in the leading ministries but still encouraging. Indeed, the ministry has announced that from 11 September it will freeze bidding on the Yanba dam, at least temporarily. The ministry still intends to argue for the dam, for which funds have already been dispersed to neighboring prefectures, but the DPJ probably has the upper hand.

The big fight will be with MAFF, which is truly threatened by the DPJ's income support plan and whose adminstrative vice minister has already traded words with the DPJ.

The DPJ could not have asked for a better start to its rule than to have bureaucrats dispirited and conscious of the fact that for now opposing the DPJ means opposing a public already ill-disposed to the bureaucracy, a public that whatever its doubts about the DPJ's manifesto is perhaps most sympathetic to the idea of political rule. It may be the case that neither side wants a fight for now, the DPJ because to wage open war on the bureaucracy would hinder its ability to get anything done, bureaucrats because for the moment a fight with the DPJ is a fight that they are sure to lose in the court of public opinion.

For more on the possibilities of genuine administrative reform, I recommend this essay by Karel van Wolferen, who is aware of the obstacles facing the DPJ without dismissing the possibility that the DPJ will succeed. I particularly like this sentence: "But my impression is that the individuals of the inner core of the party are deadly serious about what must be done to turn their country into what one of them, the most senior and most experienced Ozawa Ichiro, has in his writing called a 'normal country'."

Exactly so. The DPJ means what it said during the campaign, and is taking the first steps towards a new system of governance.