No. 43 — November 15, 1996


Feature Article


Jon Choy


As Japan's economy and society continue to develop in a postindustrial context, the role of local government in Japanese politics and governance is changing as well. While Japanese governors and local assemblies under the current constitution do not enjoy the same rights, powers and freedoms as governors and state legislatures in the United States, they nevertheless play key roles in executing central government policies and responding to local voters' wishes. In fact, with Japanese voters' distrust of national politicians and central government bureaucrats at an all-time high and the stability of the recently reelected Hashimoto cabinet in doubt, local government officials find themselves increasingly in the spotlight on some controversial issues. More than a few political observers, frustrated with the lack of progress toward political and policy reform at the national level, have begun to pin greater hopes on local government to experiment and adopt innovative solutions to chronic economic and social problems.

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Weekly Review

--- by Barbara Wanner

To the surprise of no one Ryutaro Hashimoto, president of the Liberal Democratic Party, easily won reelection to Japan's top government leadership position in November 7 Diet elections, garnering 262 of the 498 ballots cast in the 500-member House of Representatives, the chamber with principal authority for selecting the prime minister. To the disappointment of many, however, Mr. Hashimoto's victory may not necessarily usher in a period of strong leadership, political stability or meaningful policy changes. Deprived of a simple majority, or 251 seats, in the lower house following October 20 polls, the LDP found it expedient to forge a "loose union" October 31 of its 239 members and the 17 representatives of its two previous ruling coalition partners, the Social Democratic Party of Japan and the New Sakigake Party. This grouping ensured Mr. Hashimoto's victory as prime minister and is expected to facilitate action in 10 policy areas. (A few independents and opposition party defectors further boosted the LDP chief's final tally.) Most observers regard this informal arrangement as inherently shaky, however.

--- by Christopher B. Johnstone

When news of President Clinton's solid reelection victory spread worldwide, Tokyo responded with gushing statements of congratulations. Prime Minister Ryutaro Hashimoto, for example, commended the American people for their "very great choice" and noted, "I know that with [Mr. Clinton in office] I can make progress on any issues that may confront us." Chief Cabinet Secretary Seiroku Kajiyama further asserted that Tokyo "hopes to continue closely cooperating with President Clinton to further reinforce Japan-U.S. relations for the sake of world peace and prosperity." Behind the tatemae of formal diplomatic niceties, however, Japanese officials and the media have offered a more guarded assessment of the likely course of U.S.-Japan relations in a second Clinton administration. Most Japanese observers appear to believe that bilateral trade disputes will not assume the level of political prominence that often characterized negotiations during Mr. Clinton's first years in office. Nevertheless, officialdom in Tokyo remains concerned that new disputes or ones currently on the table — ranging from deregulation of Japan's insurance market to the National Police Agency's procurement procedures for a next-generation communications system — could reignite transpacific trade frictions, particularly if the U.S. economy slows for a prolonged period or the bilateral trade imbalance widens further. Tokyo also is watching closely for hints of new developments in other components of Washington's foreign policy; most important among these is U.S. policy toward the People's Republic of China. The challenges of transpacific cooperation on issues of mutual interest in third countries without question is an increasingly important element in U.S.-Japan relations.

--- by Douglas Ostrom

Japan's current account teeter-totter has as much pushing up against it as pushing down on it. In the July-September period the nation's current account surplus dropped 31.4 percent as compared to a year earlier (see Table 1); the offset — capital flows — coincidentally shifted toward a net outflow. In the face of these conditions the Bank of Japan and the Ministry of Finance have seen their balancing role diminish. As such, recent criticism that MOF has been meddling inappropriately in exchange markets would appear to be somewhat wide of the mark.

--- by Jon Choy

Japanese bureaucrats and government policymakers long have used their control of information to augment their statutory and constitutional powers and shield their decisions from public questioning. Since the Vietnam War and the Watergate scandal, in contrast, Americans have held elected officials and government bureaucrats to increasingly stiffer standards of accountability. Although the Freedom of Information Act of 1966, which gave legal force to citizens' requests to government agencies for information about their decisions and actions, existed before these historic events increased distrust of government, the FOIA's importance increased in 1974 with the addition of the Privacy Act, which opened government files on an individual for viewing by the person concerned. Now, after more than a year of study, a panel of the Administrative Reform Committee submitted a proposal November 1 for a Japanese version of FOIA to the Management and Coordination Agency. Although the proposal contains some significant caveats, it still would give Japanese citizens unprecedented access to government information. MCA, which is part of the prime minister's office, plans to hold further discussions and may draw up legislation based on the panel's suggestions for submission to the Diet in FY 1997. If freedom-of-information advocates continue to pursue successfully their cause in the court system, however, the proposed FOIA bill may seem a bit redundant.


After 14 months of investigation, the U.S. Federal Maritime Commission has determined that "restrictive and discriminatory licensing practices" employed by the Japanese government and the Japan Harbor Transportation Association have "locked [U.S. shipping lines] into an unworkable port system," as FMC chairman Harold Creel told reporters November 6. Based on this determination, the independent agency's commissioners voted the same day to charge vessels operated by three major Japanese shipping companies $100,000 a ship per visit to a U.S. port of call until the situation is rectified. The FMC decision followed by a month a petition from the European Union seeking similar changes via consultations held under the aegis of the World Trade Organization (see JEI Report No. 40B, October 25, 1996).

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