The Changing Japanese Political System: The Liberal Democratic Party and the Minstry of Finance (review)

The Changing Japanese Political System offers a concise analysis from a historical institutionalist perspective of changes in the role of the central bureaucracy in Japan since 1993. Hori argues that the advent of coalition governments after 1993 fundamentally disrupted a stable and efficient issue-settling system based on a clear-cut and complementary division of labor between ministries (especially the Ministry of Finance, or MOF) and the Liberal Democratic Party (LDP). With new patterns of policymaking and party-bureaucracy relations still unsettled at the time of the book's writing, she concludes that policymaking works far less efficiently than in the past.

The crux of the book is a conception of the LDP-MOF issue-settling system, which Hori sees as epitomizing relations between politicians and bureaucrats in the era of LDP dominance. The system consisted of a division of labor between MOF (policymaking and planning) and the LDP (microlevel intervention in budgeting in order to perpetuate electoral strength). Both institutional actors were characterized by a high degree of internal cohesion and discipline, and by tacit agreement the LDP did not seek to attack MOF's institutional integrity. As it developed over the years, this system was remarkably stable, but all that changed in 1993. After 1993, the LDP was no longer able to monopolize the introduction of substantive legislation, MOF had to respond to multiple masters, and challenges to received ways of doing business by coalition partners and "policy-oriented" junior LDP members led to greater uncertainty and thus variability in the policymaking process.

Empirically, the book relies on a comparison of the policymaking process in three modern case studies—the introduction of the consumption tax in 1989 (chapter five), financial turmoil in 1994–98 (chapter six), and the reform of the Ministry of Finance from 1996 to 1999 (chapter seven). Two additional chapters provide overviews of relations between bureaucrats and politicians from the time of the establishment of Japan's modern bureaucratic system in the Meiji period until the early 1990s (chapter three) and political shifts since 1993 (chapter four).

I address the book's argumentation and evidence below, but before doing so, it is worth noting that there is relatively little that is original in the overall analysis. This appears at least partly because Hori has not made use of a number of standard works that address identical or nearly identical questions, including John Campbell, Contemporary Japanese Budget-Making (University of California Press, 1977); Yamaguchi Jirō, ōkura kanryō shihai no shūen (Iwanami Shoten, 1987); Masaru Kohno, Japan's Postwar Party Politics (Princeton University Press, 1997); Takaaki Suzuki, Japan's Budget Politics: Balancing Domestic and International Interests (Lynne Rienner Publishers, 2000); and my own Unmaking the Japanese Miracle (Cornell University Press, 2001). The reason for at least some of the omissions appears to be that the book is based on a dissertation that was completed sometime around 2000 or 2001. But given the book's publication date of 2005, there should have been enough time for updating basic sources. Her account of the development of MOF-LDP relations is particularly similar to that of my book, which addresses the 1985–2000 period, MOF relations with party politicians and the Bank of Japan, and several of the same substantive issues. Not surprisingly, I find myself in agreement with much of the analysis in this book, although I see some deficits in argumentation and presentation. On the other hand, the book also makes some positive contributions to our understanding of these phenomena.

I see three main contributions of this book. First is the detailed description of some of the episodes it analyzes. I learned a great deal about coalition policymaking. The book is also very informative about internal politics of the LDP in the post-1993 cases, particularly clashes between junior and senior politicians and contestation between the mainstream and antimainstream groups (awkwardly...