Transition troubles

The work of picking a cabinet is done, said Hatoyama Yukio Sunday. He is scheduled to meet with Ozawa Ichiro Monday to finalize the lineup.

It seems that Ozawa and Hatoyama are in disagreement over the appointment of Fujii Hirohisa as finance minister, perhaps because Fujii — despite having been close with Ozawa throughout the 1990s, following Ozawa out of the LDP and participating in his various parties before joining the DPJ with Ozawa — was one of a handful of prominent DPJ leaders who suggested that Ozawa ought to step down in response to the Nishimatsu scandal. (Although not a single story about Ozawa's disapproving of Fujii bothered to list a reason, leaving people like me to speculate.)

If that is in fact the reasoning behind Ozawa's opposition, then we're already seeing the potential downside of Ozawa's becoming the single greatest veto player within the DPJ, the "hyphen" between cabinet and ruling party. Ozawa's grudges should not be the basis for making cabinet appointments, especially one as important as the finance ministry — and a potential minister as capable as Fujii. Indeed, we can add another qualification to Fujii's already lengthy list: a willingness to stand up to Ozawa. This is precisely the quality that Hatoyama will need in a senior member of his cabinet.

In the process, the appointment of Fujii is the first test of whether Hatoyama can control Ozawa and force the incoming secretary-general to adhere to the will of the incoming prime minister.

Fujii is certainly speaking like a finance minister, with recent remarks about the DPJ's plans to roll back the Aso government's stimulus spending (see Ikeda Nobuo on the implications of these ideas in light of Keynesian economics). Perhaps Fujii's appearances discussing economic policy are a sign of Hatoyama's resolve to have Fujii in his cabinet.

Sankei, meanwhile, suggests that there is also tension between Hatoyama and Okada Katsuya, his likely foreign minister, with Okada essentially criticizing for the same reason that I criticized Hatoyama and Kan before the election: saying too much too soon regarding foreign policy. (Okada also warned against the national strategy bureau becoming too powerful and usurping the work of appointed cabinet ministers, namely his own duties as foreign minister.)

For now, these grumblings are not reason to write off the Hatoyama government, but they are developments to watch. The Hatoyama cabinet will certainly not be a cabinet of Hatoyama's friends, which may be better for the government, but it will take careful management by the prime minister and senior cabinet ministers. Hatoyama is going to have to discipline his own cabinet: if he cannot get them to relinquish their vetoes over every policy decision, his government will fail. If Hatoyama actually wants to include cabinet committees — there will, after all, be at least one, the committee for coalition consultations within the cabinet — then he and Kan Naoto (perhaps the leading advocate of cabinet committees) ought to provide more details for how they'll work, how many there will be, etc.

Hatoyama will also have to address questions about what exactly he intends the national strategy bureau — Okada won't be the only cabinet minister wondering about how to relate to the office. With Kan in charge of the staff, I anticipate it will play more of a supporting role for cabinet committees than an entrepreneurial role in cabinet proceedings. But with only two days until Hatoyama is scheduled to be elected as prime minister, there are many outstanding questions about how the Hatoyama government will actually function.

Will Hatoyama be first among equals?

After appointing Ozawa Ichiro as the DPJ's secretary-general and Hirano Hirofumi as chief cabinet secretary, Hatoyama Yukio has announced his intended choices for other senior posts, none of which comes as a surprise.

Okada Katsuya, a former party leader and runner-up to Hatoyama in the May party leadership election, is the incoming prime minister's pick for the foreign ministry — although the pick has not been completely finalized. Kan Naoto, another DPJ founder and along with Ozawa and Hatoyama a member of the troika that ran the party under Ozawa, is Hatoyama's choice to head the national strategy office. Fujii Hirohisa, a former finance minister who I pegged as the likeliest and best choice to return to the finance ministry, is being finalized as the appointee.

It is hard to disagree with these assignments. Okada, whose foreign policy views are more or less consistent with the DPJ's foreign policy consensus, is nevertheless a good pick, in that Okada should be able to speak to Washington in ways that ease whatever concerns the US has about a DPJ government's approach to the alliance. Earlier this year Okada articulated a vision for an alliance less centered on security policy, a message consistent with the party's manifesto and Hatoyama's own desires — the difference being that I think Okada has been able to articulate that message better than other DPJ politicians. Okada is a reassuring pick for the foreign ministry. He should be acceptable to the party's right wing, in that Okada is more likely to give their ideas a hearing, but he should be acceptable to the rest of the party as well, in that his foreign policy vision is markedly less hawkish than the right wing (and that he is independent from Ozawa).

Meanwhile, appointing Kan to head up the new national strategy office could be inspired decision, not only because Kan, a former health minister who became famous for taking the ministry's bureaucrats over a tainted blood scandal, has increasingly emerged as the party's most eloquent spokesman regarding administrative reform (see this post) but because Kan could keep the NSO's power in check. Hatoyama said that in order to raise the stature of the NSO he wanted to make its head an important cabinet member — appointing Kan certainly qualifies, but Kan has expressed a belief in the importance of cabinet government, government by appointed ministers, not by a cell of sub-ministerial officials like the NSO. Under Kan's leadership the NSO could become less a superministry responsible for coordinating the activities of ministers and more an advisory body to assist cabinet ministers as they attempt to wrest power from ministry officials. The difference is important: the former model would introduce a new, less accountable veto player into the cabinet, while the latter would support the goal of strengthening the cabinet's collective leadership of the government, while serving the goals articulated by sitting ministers. The point is that the NSO, still a wholly unknown quantity, will be strongly influenced by its first head, and given Kan's well-stated views on cabinet government, his appointment is an encouraging sign that the office will not become a new, unaccountable power center within the government.

Finally, there is little to add to what I have previously written about the value of Fujii as finance minister. Fujii is pragmatic but in complete agreement with the party's administrative reform goals; he is a former finance ministry official who also served as finance minister in the first non-LDP government since 1955; he is close to Ozawa, but given his age and experience would not be Ozawa's puppet at the finance ministry. He will no doubt be at the center of the Hatoyama government, as various party leaders have suggested in recent weeks.

In light of these pending appointments, Hatoyama's appointment of Hirano as chief cabinet secretary makes a certain amount of sense. MTC is disappointed in the Hirano pick, but given that Hatoyama's cabinet will clearly be packed with officials independent of Hatoyama, Hirano will be the one Hatoyama confidante in senior cabinet position, one with a reputation as a troubleshooter and a political crisis manager. Hirano will undoubtedly be overshadowed by Okada, Kan, and Fujii, who have standing of their own in the DPJ and considerable policy expertise, meaning that he will undoubtedly play a smaller policy role — but that his role as, in MTC's words, "traffic cop for the Cabinet" he will be a key adviser for the incoming prime minister as he tries to command a cabinet full of heavyweights.

That is the picture that emerges from these appointments. Hatoyama will be the prime minister, the face of the government, the man who attends the summits, but in practice the Hatoyama government may be characterized by collective leadership, with cabinet ministers being relatively strong and policy decisions resulting more from deliberation among the cabinet's ministers than from decisions handed down by the prime minister. As prime minister Hatoyama may have the final say, but it seems unlikely that he will exercise presidential-style leadership — rather he will be first among equals in a powerful cabinet.

The DPJ continues to reveal its plans for government

While the DPJ may have a public relations problem, the party has continued to show during the days leading up to the general election that it is focused on ensuring a smooth transition to power in the likely event that it wins, while at the same time taking the first steps to reorganizing the policymaking process to privilege the cabinet at the expense of the bureaucracy.

In particular, more details are emerging regarding the national strategy office that is at the center of the DPJ's plans for empowering the cabinet. The party has confirmed that not only will the director of the office be a member of the cabinet, but that the head of the DPJ's policy research council will serve concurrently at policy chief and head of the NSO. And Mainichi suggests that the post will be equivalent to a deputy prime minister. The goal, of course, is to forestall the creation of a policymaking process in which ruling party organs wield veto power over the cabinet's decisions — a central feature of LDP rule. How will a DPJ create the new office as it takes power, seeing as how it has no legal standing, and seeing as how the DPJ wants the NSO to play a leading rule in budgeting? It appears that the DPJ plans to create the office as an informal planning cell coming into existence concurrently with the Hatoyama cabinet, which will then submit legislation officially creating the NSO (and, it seems, dissolving the Council on Economic and Fiscal Policy, whose functions it will subsume). Jiji's report also suggests that the office will have thirty members drawn from the Diet, the private sector, and the bureaucracy.

Given the party's emphasis on increasing the role of the cabinet in budgeting, moving at least some distance in the direction of zero-based budgeting — recently stressed by Okada Katsuya in a campaign appearance in Tokyo — moving quickly on the NSO will be crucial to the early success of a DPJ government. I hope that they've already assembled a wish list for the NSO's thirty members and have put out feelers to those outside the party.

The DPJ has also confirmed that decisions regarding sub-cabinet appointees will be made by cabinet ministers themselves, instead of by party officials. (Recall that distributing sub-cabinet posts is one of the few remaining functions left to the LDP's factions.) The goal seems to be the creation of policy teams at each ministry, with the minister and sub-ministers working together to impose the cabinet's will. Incidentally, this policy signals at least two important changes. First, it suggests that the DPJ's changes to the policymaking process involve more than just strengthening the prime minister. By bolstering the positions of individual ministers, the cabinet as a whole will be stronger. Second, by giving ministers the power to select their political subordinates, it should introduce factors other than age and faction into the distribution of posts. After all, given that the DPJ has young former bureaucrats in its ranks, why should they be prevented from holding sub-cabinet posts due to their lack of seniority? Presumably this freedom to dispense with seniority is one advantage of the relative youth of DPJ candidates.

Another plan being floated by the DPJ is increasing the number of prime minister's secretaries to six, with one being a Diet member and the remaining five being bureaucrats. The party would prefer more than one political appointee, but due to the Diet law's limit on the number of Diet members who can serve concurrently in government, Hatoyama will depend on bureaucrats at his side until the law can be revised.

Finally, if the DPJ wins a decisive victory Sunday, its transition team will begin work on Monday.

Far from playing the naïve ingenue, the DPJ is clearly serious about governing and is doing all the right things to ensure a framework will be in place by the time the Diet meets to elect a new prime minister.

The DPJ prepares for its first steps towards a new style of government

The general election may be another four days away, but the DPJ's position in the polls seems secure and so the party is acting like a "responsible party" and putting plans in motion for its transition into government.

I have already written of the names mentioned for the leading positions in a Hatoyama cabinet — but naming politicians to the leading cabinet positions as early as next week is but one of the party's plans for the first days after an electoral victory.

In order to hasten the formation of a cabinet, the party has reportedly already begun vetting some 200 politicians who could be apppointed to the cabinet, the new national strategy office, and the new administrative reform and decentralization council whose task will be to identify areas where the government can cut waste from the budget. The goal is to have the cabinet lineup set before the new Diet is convened to choose a new prime minister. As for the vetting process itself, it seems that it is focused mostly on the political suitability of prospective appointees: namely, the state of their political finances and whether they have any past or present indiscretions that might embarrass the government (women, money troubles, etc.). I am a bit dubious about the process itself — as Sankei reports, the DPJ, lacking the government resources that have been available to the LDP when forming cabinets, is basically conducting open-source investigations using newspapers and weeklies, as well as talk in a candidate's hometown to gather information. But at least it's a start, and Japanese journalists are remarkably well informed. (I hope and presume that they're talking to journalists and not just reading articles.)

But beyond laying the groundwork for quickly staffing up a Hatoyama government, DPJ leaders are trying to set the tone for the party's first months in office. Kan Naoto's remarks on foreign policy — discussed here — are for better or worse part of this trend. I am more impressed with the party's initial moves regarding preparations for administrative reform.

Plans for the national strategy office are being finalized. The party plans to staff the office with ten Diet members, and gave them the power to oversee not only the budgeting process, but foreign policy and administrative personnel decisions. The Diet members will be joined by ten outside experts, and the plan is ultimately to amend the National Government Organization Law to legitimate the office.

As for the administrative reform council, its membership will include Diet members, outside experts, and representatives from the National Governors' Association and six local groups. The council will have a role in the budgeting process, mostly by looking for ways to economize so that the DPJ might be able to afford its manifesto.

The DPJ, moreover, is considering plans for reorganizing the government's tax commission, mainly by scrapping its party tax commission. The government's tax commission has long existed alongside the LDP's tax commission, with the latter being the more important of the two. The DPJ's plan is to make the finance minister the chair, the internal affairs minister the vice chair, and to fill the commission with parliamentary secretaries responsible for taxation from ministries and agencies. This reform follows the same principles of the DPJ's other administrative reform plans: put politicians in a position to oversee and instruct the work of bureaucrats.

The bureaucrats themselves continue to brace for the likely arrival of their new DPJ overlords. The first skirmish will be over the second FY2009 supplementary budget, portions of which the DPJ has made clear it wants removed. In a speech in Fukuoka Tuesday, Fujii Hirohisa, the likely next finance minister, repeated the party's call to remove spending related to Prime Minister Aso Taro's so-called "anime palace" (AKA the "state-managed manga kissa") and other public works spending from the supplementary budget and replace it with unemployment benefits and other spending directed to the immediate needs of Japanese citizens.

It is a worthwhile question whether the DPJ can actually follow through on its desire to introduce a policymaking process centered on politicians in the cabinet. Indeed, it is the central question facing a likely DPJ government. Journalist Shiraishi Hitoshi, writing in the monthly magazine Foresight, looks into the party's manifesto for clues as to whether the DPJ will be able to succeed in reforming Japanese governance. Not unlike LDP reformists like Nakagawa Hidenao, Shiraishi sees a number of points on which the DPJ appears to have compromised previously espoused principles and thus constitute warning signs of the DPJ's going soft on the bureaucracy. Most notably, he cites the absence of a proposal for radical decentralization (either the creation of a state system or the outright elimination of the prefectural level of governance) and the absence of the party's earlier call to demand resignations from top ministry officials, which he argues will undermine the impact of more political appointees and the proposed dissolution of the administrative vice ministers' conference. He is also concerned that the party will not be able to deliver on its proposed 20% cut in administrative personnel expenses and that the party will end up working hand-in-hand with the finance ministry.

I think Shiraishi makes some fair points, but on the whole I am less worried. I have no doubt about the DPJ's desire to accomplish consequential administrative reform once in power. But revolutions are not won by zealots; they are won by the realists capable of making tactical compromises with the old guard in order to outlast their enemies. The DPJ not only has to reform Japanese governance — it has to last long enough in power to do so. Nothing would undermine a DPJ government quicker than to declare open war on ministry officials, which would likely result in an endless stream of leaks, sabotage, and foot-dragging on the part of Kasumigaseki, a unified Kasumigaseki, which would in turn undermine the DPJ's ability to deliver on some of its promises in advance of the 2010 upper house election. And as for joining hands with the finance ministry, the finance ministry may prove to be the DPJ's best friend in Kasumigaseki during the early days. The DPJ has no greater enemy than ministries like the ministry of agriculture, forestry, and fisheries, whose work has been deeply integrated in the LDP machine. It is these ministries that are especially threatened by the DPJ's plans to cut waste, and it is the finance ministry that is keen to cut waste. I have previously expressed my support for the DPJ's "realistic" turn in administrative reform, because I think it signals a recognition on the part of the party's leaders that the fight for administrative reform will be a long one and that they are better off dividing and ruling the administration than facing a Kasumigaseki united against the DPJ.

Fujii characterized it thusly: "The LDP is currently beneath Kasumigaseki. We will place Kasumigaseki under the DPJ. It is imperative to have a system that uses Kasumigaseki." The DPJ cannot govern alone. It needs to be able to use the talent and diligence of the national administration in order to realize its plans, imperative to remaining in power, which is turn imperative to reforming the government over the long term. Administrative reform still will not be easy, but at least the DPJ appears to recognize that it is a goal to be pursued steadily and patiently.