"Breaking the Iron Triangle". Contemporary Attempts on Reforming the Japanese Policy Making Process

Table of Contents

Table of Illustrations

List of Abbreviations

Glossary of Japanese Terms

List of Names

1. Introduction

2. The Iron Triangle
2.1 The Iron Triangle Model
2.2 Actors within the Iron Triangle
2.2.1 Liberal Democratic Party
2.2.2 Bureaucracy
2.2.3 Industry
2.3 Interlinkage between the actors
2.3.1 Bureaucracy and Industry
2.3.2 Industry and the Liberal Democratic Party
2.3.3 The Liberal Democratic Party and Bureaucracy
2.3.4 University ties

3. Reforms under Koizumi Jun'ichirō
3.1 Institutional Changes
3.2 Endurance of the Changes

4. Reforms under Hatoyama Yukio
4.1 Objectives of the Reform
4.2 Challenges

5. Juxtaposition of Reform Attempts
5.1 Similarities
5.2 Differences
5.3 Evaluation

6. Conclusion

7. Bibliography

Table of Illustrations

Illustration 1: Simple Image of the Iron Triangle Model

Illustration 2: Interlinkage between the actors of the Iron Triangle Model

Illustration 3: Restructuring of government ministries during the Administrative Reform

Illustration 4: Iron Rhombus Model

List of Abbreviations

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Glossary of Japanese Terms

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List of Names

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1. Introduction

On August 30, 2009, Lower House elections for the bicameral Diet were held in Japan where the DPJ, short for Democratic Party of Japan, achieved a landslide victory. Never before has the opposition party in Japan reached such a clear success in becoming the new ruling party of Japan and making the thus far dominant Liberal Democratic Party, abbreviated as LDP, the new opposition (Winkler 2009: 47). As the newly elected government argues that the Iron Triangle Model, which dominates Japanese policy making processes, is outdated and proposed plans on how to reform it, new discussions about this post-war concept arose (The Economist Intelligence Unit Limited 2009a: 1). Thus, this paper will deal with the following questions. In how far has the Iron Triangle Model been reformed in the recent years? Is Japan shifting away from this post-war model and, what, if anything, has been achieved by contemporary reforms? In how far are the reform attempts of former Prime Minister Koizumi and Prime Minister Hatoyama similar to each other? The goal of the paper is to answer these questions while also giving a diligent insight and thorough understanding of the Iron Triangle Model. Moreover, this model for Japanese policy making and its up-to-dateness will be rated. For answering these research questions, not only the newly proposed plans of the Democratic Party of Japan are to be elaborated and evaluated, but also the contemporary reform attempt of Koizumi Jun’ichirō, which started in 2001, is to be explained. While most scientific analyses and traditional studies tended to focus almost exclusively on either Prime Minister Koizumi’s or Prime Minister Hatoyama’s reform attempts in economic as well as institutional terms, this paper spotlights on a juxtaposition of Koizumi Jun'ichirō and Hatoyama Yukio’s institutional reforms.

The reform attempts will be compared and evaluated based on scientific journals and research papers that solely focus on one of the actors or specific topics discussed in this analysis combining their findings. Also, official government information, publications by political parties and data from textbooks will deliver theoretical background and additional insight. The theory applied to solve the research question is the Iron Triangle Model, which characterizes Japanese policy making throughout the post-war era. An in-depth evaluation of the model, the actor’s roles as well as the reform attempts themselves will be executed to present a sound juxtaposition.

This paper proceeds in five sections. After an explanation of the Iron Triangle Model at the beginning of the second chapter, the roles of the individual actors within this model are to be elaborated to provide a profound understanding for this paper. Following this part, the chapter will focus on the interlinkage between the actors of the Iron Triangle as this model is characterized by such close-knit ties. Having understood the theoretical framework for this paper’s comparison, chapter three will introduce a contemporary reform attempt executed by Koizumi Jun'ichirō during his time as Prime Minister from the year 2001 to 2006. Focusing on the institutional changes that have an effect on the Iron Triangle Model, not only the reform itself but also its endurance and success are to be assessed. The fourth chapter will discuss a second reform attempt on the Iron Triangle Model by Hatoyama Yukio. This will be done by explaining the objectives pronounced by the Hatoyama Government as well as the challenges the administration has to face. The juxtaposition of the reform attempts will be executed in chapter five, first pointing out the similarities and then focusing on the differences of the plans of Koizumi Jun'ichirō and Hatoyama Yukio. The reform attempts will be evaluated before the conclusion will offer a future outlook, summing up the paper.

2. The Iron Triangle

First of all, comprehension of the Iron Triangle Model is essential for understanding the essence of this paper as it is the theoretical framework on which this analysis as well as the comparison are based. To comprehend the Iron Triangle, the tripartite model itself will be explained. After having understood the basic idea of the Iron Triangle Model, the roles of the individual actors of the ruling triad will be detailed. Further, the intertwining relations of the three groups will be elaborated in this chapter.

2.1 The Iron Triangle Model

The Iron Triangle Model of Japanese policy making is a well-known post-war concept focusing on three main actors: the dominant governing political party, which is the Liberal Democratic Party, the central bureaucracy, and the zaikai, the financial world, which refers to the big businesses within the Japanese industry (Hook et al. 2001: 41). The underlying idea within this model is the close interlocking and interlinking between the three actors of the ruling tripod (Derichs and Lukner 2008: 244). This behavior can be explained as neo-corporatism, which is defined as the process of voluntary linkage of dominant interest groups and the apparatus of state. By doing so, the interest groups are formally installed within the political decision making process, which is the case in Japan. The basis for such a system is a push-and-pull relationship between the dominant institutions that established themselves over the last fifty years starting in the post World War II period (Törkel 1995: 32). This means the most important idea behind this model is that each part of the interlinked triangle has a certain power over both other sides. Hence, it can be said that the three actors influence each other and their cooperation is necessary to make political decisions (Klevenhörster 1973: 66). This is depicted in ‘Illustration 1: Simple Image of the Iron Triangle Model’, which shows a simplified graphic of the Iron Triangle Model and the intertwining relationship between the actors.

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Illustration 1: Simple Image of the Iron Triangle Model

Source: adapted from Klevenhörster 1973: 66

Deductively, the principle of bilateral control of power within the actors of the Iron Triangle, as well as mutual dependence, is greatly characterizing the Japanese policy making process (Klevenhörster 1993: 101). Thus, mutual, reciprocal consensus is a main requirement of Japanese politics (Klevenhörster 1993: 97-98). By adhering to such a concept, the ruling triad creates a situation in which all actors of the Iron Triangle are better off (Hartmann 1992: 199). “The three groups comprising the elite triumvirate are united, both in purpose and action, and participate in most, if not all, important policy decisions” (Schmidt 2005a: 49). The extent and degree to which the actors display unity cannot be found in any other modern nation (Kerbo and McKinstry 1995: 173). Other parties than the industry, the LDP and the central bureaucracy are mostly excluded from the decision making process within Japanese politics (Schmidt 2005a: 49). As this post-war policy making model is still a main characteristic for consensus-driven Japanese politics, it is important to understand how it is executed and to which extent it influences policy making in practice.

2.2 Actors within the Iron Triangle

Having explained the underlying ideas of the Iron Triangle Model itself, the tradition roles and sources of power of the LDP, the central bureaucracy and the industrial sector will be elaborated on in the following to provide further in-depth understanding of the theoretical basis of this paper.

2.2.1 Liberal Democratic Party

Ever since the merger of the Liberal Party and the Democratic Party to become the Liberal Democratic Party in November 1955, the LDP has dominated Japanese politics and became the leading conservative party within Japan (Kishimoto 1982: 87). However, as the bubble economy in Japan collapsed, political dissatisfaction within the population became prominent (Liberal Democratic Party of Japan 2010b). Only in 1993 a multiple-party coalition was able to assume power making the LDP the opposing party (Köllner 2006: 249). The fragile coalition consisting of eight parties was led by Hosokawa Morihiro who found the Japan New Party, and Ozawa Ichirō who later became President of the Democratic Party of Japan. Even though the LDP was not in power, it was still the biggest party in the Diet (Dürkop and Berkofsky 2009: 1). But after only ten months into session, the Liberal Democratic Party took advantage of the tension in the ruling coalition and was back in office. Since its foundation in 1955, the LDP has only been out of power for merely eleven months altogether (Köllner 2006: 249). This gives the conservative party a superior status and great influence within Japan (Duverger 1959: 317). As the conservative party has dominated Japanese politics, this system can be called a one-party democracy (Katz 2000: 30). There are many different suggestions as to why one party was able to stay in power for such a long time. One popular justification for the party’s authority is the political culture explanation, in which researchers deem that the Japanese voters were brought up in a traditional Japanese political culture that socialized them into acceptance with authority. For that reason, the Japanese electorate, who subscribes traditional cultural values is more likely to trust the incumbent government and is unlikely to vote the leading party out of office (Tanaka 2007: 3). This explanation is also supported by Geert Hofstede, a Dutch sociologist who studies interactions between cultures. Japan ranks as a high Long-Term Orientation country in his analysis. This means that change is less likely to happen in such a country (Hofstede 2010). This is corroborated by the fact that, in the past, habitual voters in Japan were very common. They voted out of habit and not because of close links with one party or another (Richardson 1997: 26). A different popular explanation is that the LDP is a catch-all party without a strong vision which is characterized by its many factions, the so-called habatsu, that cover a variety of voter interests (Hook et al. 2001: 52-53). Factions are acting within political parties as cliques (Köllner 2001: 5). As habatsu have different stances and are flexible, it was one of the benefits of the LDP that its support base was fluid and not only dependent on one particular group of voters (Maswood 1995: 371-372). Furthermore, some researchers suggest that the opposition did not inspire public confidence and thus did not make itself more attractive than the LDP (Hayes 2001: 317). Additionally, the LDP is mainly the only party that can claim legitimacy to be the ruling party on the basis of past performances (Tanaka and Martin 2003: 47). However, this analysis does not intend to explain why and how the LDP dominated Japanese politics for such a long time since it is out of the scope of this paper as it primarily focusing on the Iron Triangle Model. Nonetheless, due to different reasons including the ones mentioned above, one can say that “in Japan, the dominance of the LDP throughout most of the postwar period has worked to define the legislative process” (Hayes 2001: 57). Compared with the other groups within the elite triumvirate, the LDP is the only actor that has a democratic mandate since its members are elected (Hook et al. 2001: 51). Traditionally, the leaders of the strongest factions within the LDP are highly important as they can influence election procedures due to the number of supporters (Shinoda 2009: 1). The main faction leaders basically choose who among them, or their delegates, would hold the party presidency (Estévez-Abe 2006: 649). As the party leader, who then normally also becomes Prime Minister of Japan, is elected, faction leaders have a decisive role within the conservative party (Shinoda 2009: 1). Within the LDP one can usually find about five habatsu, which compete for power over the conservative party. Hence, factions characterize the structure of the LDP and this inner party conflict influences Japanese policy making as habatsu are greatly responsive to outside pressure (Hayes 2005: 75). One can say that the LDP, which is characterized by factions, established itself as the ruling power as it has an elected mandate for the last fifty years and, thus, has appointed the Prime Minister from its rows and executed the main political leadership within Japan.

2.2.2 Bureaucracy

The central bureaucracy refers to the ministries and agencies in Japan, which are not elected. It has traditionally been a leading influence in policy making (Hook et al. 2001: 42). At the current state, one can find thirteen ministries including one office, the Cabinet Office. This office is placed on top of the hierarchy and is supervising all other ministries (Estévez-Abe 2006: 642). Each individual ministry is organized into six to twelve bureaus, known as kyoku, which are then divided into divisions, denominated as bu, or directly into sections, called ka. Each ka employs approximately 20 to 30 people and thus poses the working units of each ministry. Most ministerial bureaus also consist of additional organs like museums, libraries and research institutes. Shingikai, the deliberation councils existing in each ministry, enable policy input from people who are neither civil servants nor politicians such as journalist, experts, professionals and industry participants (Pempel 1992a: 355).

The employees of the bureaucracy are recruited from Japan’s top universities and spend all their working lives within one agency or ministry (Kerbo and McKinstry 1995: 84). By going through a career within one ministry, these intellectuals build up the expertise that the bureaucracy is well known for (Hayes 2001: 62-63). Already before World War II, the administrative elite dedicated themselves to the Tennō, the Japanese Emperor, and the service of the state (Stockwin 2008: 137). After the Second World War, intense government-driven economic policies were introduced and thus, the market was controlled by the state bureaucracy. On the one side, the power of the administrative leaders over the market was necessary to achieve the Japanese goal of rapid national economic growth. On the other side, the civil servants’ power can be traced back to the fact that the bureaucracy was the only state institution that was not eliminated or changed during the American postwar occupation (Choi 2007: 932). The most powerful ministries are the Ministry of Finance, abbreviated as MOF, and the Ministry of Economy, Trade and Industry, METI, and the former Ministry of International Trade and Industry, MITI. Traditionally, it has been the sole power of the Ministry of Finance to approve all budget plans for each year (Schmidt 2006: 14). The Ministry of Economy, Trade and Industry and its predecessor MITI’s job is the oversight and promotion of Japan's industry and trade influencing and shaping domestic politics (Stockwin 2008: 151). Thus, one can say that the civil servants of the bureaucracy have had a historic influence on the executive branch. This authority came from the fact that the bureaucrats are in charge of drafting bills within the Japanese policy making process (Abe, Shindō and Kawato 1990: 22). Besides that, how important the bureaucracy in Japan is, can be observed when looking at the leading positions in each government ministry. Due to the high level of expertise, the vice-minister of a ministry or agency, who is part of the bureaucracy, is oftentimes considered more powerful and more informed than the minister, who is a politician selected by the Japanese Prime Minister (Kerbo and McKinstry 1995: 88). Thus, one can say that traditional habits as well as expertise alongside with the authority to draft bills are the bureaucracy’s source of power.

2.2.3 Industry

Thirdly, the industry is one of the main actors within Japanese policy making. Big businesses as well as small and medium sized enterprises make up the business community (Hook et al. 2001: 55). Within Japan one can find the largest and most powerful corporations and banks in the world (Pempel 1992b: 374). As part of the national industry it plays an important role since it has close-knit ties through human and financial networks to political parties (Hook et al. 2001: 55). Some people argue that the business community’s power over the political decision makers is absolute (Vogel 1975: 37). While that is an extreme point of view, one can clearly say that zaikai was able to influence Japanese policy making. However, the influence varied throughout the post-war era (Vogel 1975:40). In Japan, one can find two main economic pressure groups, which represent the interests of the industry: the Keidanren and the Nikkeiren (Schmidt 2005a: 49). The first, Keidanren, is short for Keizai Dantai Renōkai, which is the Federation of Economic Associations (Neary 2002: xiii). Keidanren was founded in 1946 to promote economic redevelopment of the nation and to advocate its members’ concerns toward the politicians (Klein 2006a: 86-87). The latter, Nikkeiren, is the abbreviation for Nihon Keieisha Dantai Renmei (Neary 2002: xv), which is the Japan Federation of Employer’s Associations acting as umbrella association of employers in Japan (Schmidt 2005a: 49). In 2002, Keidanren and Nikkeiren merged to become the Nippon Keidanren, short for Nippon Keizai Dantai Rengoukai, the Japan Federation of Economic Organizations, representing the interests of the business sector (Stockwin 2008: 153). In 2009, Nippon Keidanren had 1,609 members; 1,295 of which were companies, 129 members were industrial associations and 47 were regional economic organizations. The Japan Federation of Economic Organizations’ mission is to accelerate the growth of the economy by strengthening Japanese businesses. This is done by communication with various stakeholders such as political leaders, labor unions, administrators, and citizens (Nippon Keidanren 2010). As the major interest group within Japan, the industry can wield pressure on political processes (Hayes 2001: 148-149).

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