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Two-Party Japan Democracy Undone in 39 Months as DPJ Falls

It took 54 years for Japan’s politics to produce a viable opposition party, and 39 months for it to self-destruct after winning power, splintering prospects for an enduring policy-driven two-party system.

The Democratic Party of Japan lost three-fourths of its seats in parliament’s lower house three years after sweeping the Liberal Democratic Party from a half-century of almost unbroken rule. An LDP-led coalition won a two-thirds majority in the 480- seat chamber, according to public broadcaster NHK.

While the DPJ’s leaders came under fire for the response to the March 2011 earthquake and nuclear disaster, the biggest collapse in public support preceded the crisis. Undermined by a faction boss who later split and took about 50 seats with him, the DPJ flubbed its historic chance at the beginning by pledging to move a U.S. military base off Okinawa, then reneging on it.

“It was a missed opportunity for now to build a true two- party system,” said Ellis Krauss, a professor of Japanese politics at the University of California, San Diego. “Japan’s major challenges, including an aging society and a huge debt problem, would be manageable if only the political system weren’t so dysfunctional. I’m fairly pessimistic the political leadership will confront the problems any time soon.”

The DPJ lost more than 173 of its 230 seats in the lower house, NHK’s vote count showed, the worst showing of any governing party since the end of World War II. The Japan Restoration Party, led by ex-Tokyo Governor Shintaro Ishihara and Osaka Mayor Toru Hashimoto, won almost as many seats as the DPJ, making it the third-largest group.

‘Couldn’t Deliver’

“They talked big but they couldn’t deliver,” said Masatsugu Kitano, a 77-year-old company executive in Tokyo, speaking days before yesterday’s election, referring to the DPJ. “My trust in political parties is basically zero.”

Voter turnout was 59.3 percent, the lowest since World War II, NHK reported.

Prime Minister Yoshihiko Noda, the DPJ’s third premier in as many years, said he would quit as party leader. LDP leader Shinzo Abe, in line to reclaim the office he left in 2007, said voters “will be looking carefully at the LDP to see if we fulfill their expectations.”

After governing for all but 10 months since 1955, the LDP was ousted in 2009 by the DPJ, which vowed to curb bureaucrats’ power, cut public works spending and boost child support. Instead, the child payments were cut back and Noda this year pushed through a bill doubling the sales tax to cope with record debt, fulfilling a decade-long push by the Ministry of Finance.

Okinawa Flip-Flop

Yukio Hatoyama, the DPJ’s initial premier, entered office pressing a pledge to relocate the Marine Corps Air Station Futenma. Designed to reduce the burden of American military operations on the people of Okinawa, the move backfired when it soured relations with Japan’s top ally, stirring concern among the nation’s business community.

Hatoyama later reversed course, inciting criticism from Okinawans who had anticipated the government following through on its commitments. His approval rating sank below 20 percent, from 75 percent, and he stepped down after eight months in office. Naoto Kan, who yesterday fought to hold off an LDP challenge for his own seat in the Diet, took over.

“The biggest reason for the DPJ’s downfall was it went into the election with a manifesto, and said it would carry out those promises,” said Kazuhisa Kawakami, a professor of political science at Meiji Gakuin University in Tokyo. “Then of course there was the problem of the Okinawa base, which did in Hatoyama.”

Socialist Opponent

The LDP, the product of a merger of parties in the postwar re-establishment of democracy in Japan, governed for decades with little more than a Socialist opponent that failed to gain traction with the centrist voters.

With Japan’s rapid development through the 1960s and 1970s, and the success of its powerhouse automakers, steel producers, shipyards and electronics companies, the party found its dominance unchallenged. Support for public works and the construction industry helped seal its hold on power.

A burst property and stock-market bubble undermined the model in the early 1990s. Ichiro Ozawa, an LDP lawmaker who was an acolyte of 1970s Prime Minister and power broker Kakuei Tanaka, helped overthrow the party in 1993. Even so, the coalition government that resulted proved unstable and lasted only 10 months.

Koizumi Interlude

Hatoyama and Kan formed the DPJ in 1998 from several small parties with competing interests and Ozawa’s group merged with it in 2003, a legacy that hindered unity. As the party started to build itself, it found its reformist message overshadowed by that of a leader of the LDP itself -- Junichiro Koizumi, who served as prime minister from 2001 to 2006.

Once it finally took power in the aftermath of the 2007-2009 global financial crisis that sent Japan’s economy to its smallest size -- unadjusted for prices -- since the early 1990s, the DPJ foundered. Ozawa, who had stepped down as party leader over a funding scandal in May 2009 while remaining head of the biggest faction, publicly opposed Hatoyama, Kan and Noda, before finally leaving the DPJ in July over the sales-tax increase.

Kan’s support for raising the sales tax and the party’s suspension of Ozawa during the faction leader’s trial for campaign-finance violations provoked an internal backlash that hurt the second DPJ prime minister.

Kan had his own campaign funding issues, and was answering questions over a foreign contribution in parliament on March 11, 2011, when a record 9.0 earthquake struck northeastern Japan, spawning a tsunami that crippled the Fukushima Dai-Ichi nuclear power plant. The catastrophe saw about 19,000 people killed and forced the evacuation of 160,000 more.

Earthquake Aftermath

While the government pledged 19 trillion yen ($227 billion) in rebuilding, and Kan vowed to end Japan’s reliance on nuclear power, the DPJ and LDP quarreled over the response to the disaster, sending support for both parties plummeting.

“The DPJ was a victim of bad timing,” UCSD’s Krauss said. “The Fukushima quake and tsunami was unprecedented in scale. Kan did as well as he could but it wasn’t enough for the public. They expect too much in too short a time.”

With Japan’s economy contracting and social welfare costs rising in the world’s most-rapidly aging society, Abe will be under pressure to deliver the kind of results he couldn’t last time. The DPJ remains the biggest party in the upper house of parliament, and could still rebound in elections for the chamber in July should the LDP prove a disappointment again.

Stocks Jump

Stocks climbed in the weeks leading up to the election as investors bet that Abe will follow through on speeches calling for the central bank to step up monetary stimulus. The Nikkei 225 Stock Average advanced 12 percent in the past month.

Yet Abe will inherit a recessionary economy, with electronics champions from Sharp Corp. to Sony Corp. struggling to cope with the yen’s climb in the past half decade and intensified Korean competition. Public debt has grown by about a fifth since his last term in office, cut short by intestinal illness.

Steven Reed, a political scientist at Chuo University, points out that the Democrats’ 2009 landslide followed a decisive defeat four years before.

“People said in 2005 that the Democrats would never recover and after 2009 that the LDP could never recover,” Reed said. “I think quite the reverse.”

At the same time, the DPJ’s failure, the return of the LDP and the proliferation of other parties suggests it will take some time before a stable two-party system is in place. Hokkaido University political science professor Jiro Yamaguchi, who three years ago said that “Japan has at last truly become a democracy,” is now less sanguine.

“I was overly optimistic,” Yamaguchi said. “Japanese politics has gone back to square one. It’s pathetic.”

To contact the reporters on this story: John Brinsley in Tokyo at jbrinsley@bloomberg.net; Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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