shifts in japan’s political economy regime
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Shifts in Japan’s Political Economy Regime. Adjustments and changes. Conservative dominance (’60s). Power and influence of conservatives rose at the expense of the political left conservative supporters benefited prosperity and peace side payments - PowerPoint PPT PresentationTRANSCRIPT
Shifts in Japan’s Political Economy Regime
Adjustments and changes
Conservative dominance (’60s)
• Power and influence of conservatives rose– at the expense of the political left
• conservative supporters benefited– prosperity and peace– side payments
• successes in economy and in politics reinforced each other
• favorable international environment
Challenges (1970s and 1980s)
• Socioeconomic bases of support– new political parties, independent
movements, and changes in voter patterns– divisions within regime supporters
superseded earlier left-right divisions– central concern of regime continuity
Socioeconomic challenges
Socioeconomic challenges
40%
20%
40%
16%
18%
66%
10%
11%
79%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Employment at Different Businesses in Japan
firms 40% 66% 79%
self-employed 20% 18% 11%
family business 40% 16% 10%
1947 1970 1985
Socioeconomic challenges
• rise of large and technologically more sophisticated industries
• rise of the service sector firms
• relative decline of agriculture sector
• relative decline of small businesses
• shrinking bases of the conservative regime’s electoral coalition
Challenge 2: aging population
5%
7%
14%
0%
2%
4%
6%
8%
10%
12%
14%
1945 1975 1995
% of Japanese Population Aged 65 or Older
14%
25%
33%
0%
5%
10%
15%
20%
25%
30%
35%
1975 2000 2015
Ratio of Retirees to Workers
Challenge 3: labor shortage
• Economic success– rising demand for labor
• expanding influx of labor after WWII– low-cost, young, highly-skilled
• changing age profile of the population– bargaining power shift from management to
labor
Challenges to LDP
• Urbanization and rise of middle class
• Socioeconomic base of conservative support shrank
• Mobilization capabilities of LDP supporters declined
• People identified with party independents increased– outnumbered LDP supporters in 1974
Challenges to LDP
• Increased voter option in 1960s and 1970s– formation of new parties– transformation of existing parties– in both conservative & the political left
• threatened both LDP and JSP
• threatened conservative electoral and legislative hegemony
LDP responses (1970s & ’80s)
• Attract new electoral support– shore up conservative support– draw away organized labor from DSP & JSP– attract the new middle class
• non-voters and non-partisan voters
• LDP dilemma between traditional supporters and new appeal
19701975
19801985
19901991
1992
Japan
United States
0
1
2
3
4
5
6
7
Infrastructure Spending as % of GDP
Japan 4.5 5.3 6.1 4.7 5.1 5.1 5.7
United States 2.6 2.1 1.7 1.7 1.7 1.8 1.8
1970 1975 1980 1985 1990 1991 1992
LDP responses
• Adjustments in policy or institutions
• less tightly linked policy profile
• firm-level cooperation with labor
• substantial deficit finance for political target
• fiscal austerity and privatization
• manufacturing firms became multinational
• defense and security policies
LDP electoral recovery
Economic recovery (1980s)
Bubble burst
Stock market woes (2000s)
International challenge
• External conditions– challenged conservative policies– threatened conservative socioeconomic
support
• challenges to exchange rate policies– Bretton Woods monetary system broke down
International challenge
• international price of raw materials– Japan’s dependency on imported oil (99%)– oil prices quadrupled in 1973– oil prices rose by 2.8 times in 1979-80– inflation– balance of payments– domestic productivity
International challenge
• Increasing pressure from US and Europe– reductions in Japanese tariffs, import quotas,
and non-tariff barriers– voluntary export restraints– open Japanese market– Japanese military spending
• challenges to vital aspects of Japan’s conservative economic policy profile