Fumio Kishida returned to power as the Japanese prime minister last month following his party’s success at the general election on October 31. The Liberal Democratic Party (LDP) scored 261 seats, far more than the 233 necessary to secure a majority in the lower house. However, the LDP’s electoral success is misleading. The party faces major macroeconomic challenges and declining public approval.

New or Old Capitalism?

There is a general consensus that overall, Kishida will not dramatically shift the course of Japanese policy, especially with regards to international relations. He pledges to continue cooperation with core allies in the Pacific region and to strengthen Japan’s national and economic security. In a sense, Shinzo’s Abe’s record-setting nine years in power have not ended; his legacy has been preserved through his successors, Yoshihide Suga and Kishida.

Fumio Kishida is the newly elected Prime Minister of Japan. (Source: Wikimedia Commons)

However, the one area where Kishida seems to diverge from Abe is economics. His platform calls for a “new capitalism” that bolsters the Japanese middle class through wealth distribution. The panel he set up to discuss this agenda met for the first time on October 26. They considered policies such as giving tax incentives to companies to raise wages, helping workers recover from job loss, and increasing the protection of subcontractors. By contrast, Abeconomics took a three-pronged neoliberal approach of fiscal stimulus, monetary easing to spur investment, and deregulatory structural reform.

Yet, there is growing skepticism on the success of Kishida’s new capitalism. The Economist criticized the vagueness of his campaign and noted how his panel is only just beginning to brainstorm specific economic reforms. Others view new capitalism as only a superficial departure from Abeconomics: a political tactic of taking the opposition party’s standpoint to appeal to voters. Ultimately, redistribution is just a pathway to growth—a priority he shares with Abe.

"He needed to sound sort of new, and to sound new, he needed to sound critical, but he can't overdo the critical part," said Professor Koichi Nakano, professor of political science at Sophia University.

The Party in the House

A policy of continuation would only be advantageous if it was politically popular. On the contrary, a 2018 report by Pew Research found that 56 percent of Japanese citizens are dissatisfied with the way democracy is working in their country—nine percentage points greater than the report from 2017. The problem is compounded by the majority (62 percent) perception that no matter who wins an election, things do not change very much.

The public’s disappointment in politics is not surprising given that the LDP has dominated the Japanese government for decades. Since its establishment in 1955, it has only lost the majority in the lower house twice. Currently, The Constitutional Democratic Party (CDP) is the leading opposition party established in 2017, but it only has 96 seats in the lower house.

As a conservative party, the LDP is known to favor older, rural voters and business organizations. Before Japan reformed its electoral system in 1994, there was a widespread culture of clientelism and individual-centered campaigning. Candidates established koenkai support networks, promising to provide goods and services in exchange for electoral support. By establishing strong connections with influential interest groups such as Japanese business organizations and farmers’ agricultural cooperatives, the LDP was able to consistently win enough seats to hold a majority in parliament on its own. Although the culture of clientelism has decreased over the past few decades, the LDP has managed to maintain its foothold in government.

Appealing to old voters is crucial to the success of the LDP. First, the overall population of Japan is aging, with the percentage of Japanese citizens aged 5 and older expected to increase nearly ten percent in the next fifty years. Second, malapportionment and urban migration have created a positive feedback loop that increases the overrepresentation of rural electoral districts. As younger people are migrating to urban areas, these rural districts are becoming less densely populated and older, which in turn increases the value of the old, rural vote.

It’s a Stalemate

But there is a cost to clinging to electoral victories. Because LDP politicians rely on their conservative voter base, their policy attempts to address the aging population and low fertility rate, which have exacerbated Japan’s high public debt and economic stagnation, have been too little and too late.

Japan has the highest old-age to working-age ratio among the 38 developed countries in the Organization for Economic Cooperation and Development. However, in a 2015 comparative study of the United States, Japan, the United Kingdom, Germany, Sweden, and France, Japan had the second-lowest ratio of social expenditure on family benefits to GDP. This low figure runs contrary to the majority opinion of the Japanese public who believe that the government should increase efforts to improve the environment for raising children.

The House of Representatives also lacks political entrepreneurs who are committed to passing radical pro-family legislation. Underrepresentation of women in the Japanese Diet is a historic trend that shapes Japanese politics today: only 9.7 percent of the recently elected representatives are women. Not surprisingly, Japan ranks 147th out of 155 on the Gender Political Empowerment subindex. While more than 130 countries have adopted some form of gender quotas, Japan has only nonbinding legislation passed in 2018 calling for more gender equality in politics. An effective response to the demographic crisis requires more female legislators who can advocate for reforms that address the concerns and desires of women, particularly regarding work-life balance and the burden of childcare.

The true test for the Liberal Democratic Party and Kishida is not whether they can win the election, but whether they can successfully lead the Japanese government to tackle the demographic crisis, even if it means alienating their key constituencies.