Japan: the DPJ wins as the GRU weakens the LDP machine.

As Michael Cucek wrote last week, Japan has witnessed the subdued brutality of the DPJ’s Government Re-vitalization Unit (GRU) taking back Y1.4 trillion from various extremely unhappy NGOs and bureaucrats. This process of creative destruction is rarely seen in Japan, and while comparisons to the Meiji Restoration by some DPJ politicians are exaggerations, the fact is Japan is witnessing a real shake up in power distribution. And like any such shake up, there are winners and losers.

In this case the winners are the DPJ over the LDP and the Ministry of Finance over the other Ministries. Let me talk about the DPJ first.

Not withstanding the fact that the LDP has fallen of its bicycle since the last election, the GRU process has further benefited the DPJ in its political struggle with the LDP in three ways. Firstly, the GRU process was aimed cleaning up the mess of subsidies that years of LDP administration had built up, in the process airing a laundry list of useless and hopeless projects the LDP had let through at the public’s expense. This was always going to have a positive political windfall for the DPJ, unless very poorly stage managed.

Although the decision to freeze spending on developing “super-computer” technology caused some public concern, the general feeling was that the LDP had acted like a bull in a China shop, wrecking public finances by allowing the “Independent Administrative Organs” (dokuritsu gyousei houjin) to build duplicate building or give themselves repeated pay increases without any oversight. And indeed when pressed, to fail to defend the decisions they had made in a reasonable manner; the Educational Facilities IAO in particular is the stand-out example. The DPJ, by taking this “bull by the horns” as it were, is showing leadership and polls show continued support for GRU process and the DPJ.

Secondly, the GRU has weakened the old sinews of powers which connected the LDP to Ministries. The GRU was aimed at cutting budgetary excesses of IAO, but the effect (and quite deliberately so) is to wipe out bureaucrats’ post-career placement at a related IAO (a phenomena called Ama-kudari). The LDP had allowed bureaucrats to build themselves such golden parachutes as a quid pro quo for ministerial policy support in enacting the LDP’s preferred pork-barrel politics; a sort of you scratch my back and I’ll scratch yours relationship.

However, because the DPJ thinks it can do without the back-scratching (and the associated risk of back-stabbing) the former deal is off. This might drive the ministries to support an early LDP return. But as the LDP is cut off from power, they have nothing to offer the ministries that might induce them to turn against their de jure political masters. As such, the lessening of the ministries’ discretionary funds sees them more dependent on the DPJ politicians than before, if not necessarily more loyal.

Thirdly, the GRU has weakened the LDP’s links to rural voters. The importance of rural voters in the LDP’s election strategy is well known (see Tobias), and the GRU anti-pork barrel politics will no doubt be a threat to the LDP. In the past (paywalled, p48-9), the LDP provided a generous budget for the Ministry of Agriculture, Forestry and Fishery (MAFF). The MAFF supported the IAO Japan Agriculture Association (JA), which in turn provided electoral support to the LDP and provided financial support for farming families, ie LDP voters.

However, due to the GRU process, the JA and morphologically similar IAOs have been dealt a serious blow. The GRU recently seeing through a spate of cuts to the MAFF’s budget, including to the JA‘s education programs. Thus weakened, the JA will be less able to perform its traditional role in the LDP election strategy. As argued in the second point, with the LDP out of power and unable to provide the pork, the JA has little incentive to risk attracting the opprobrium of the DPJ by making a stand just yet; although during an election the JA is expected to be right behind the LDP, even with (or especially because) its feathers have been clipped. Additionally, the DPJ (cynical) policy of cutting out the JA and going “over their heads” to provide farming families with a direct support (via the household income support facility) further erodes the old LDP-JA-Rural voter link.

In conclusion, the GRU has seen the DPJ win large versus its rival the LDP. The GRU only by demonstrated the slipshod political guidance of the LDP as contrasted with the DPJ’s ‘fresh’ approach, but also cut important bonds between LDP and the Ministries, the Independent Administrative Organs and voters. The power shake up is on.