Tokyo Looks to London

A radical political shift is underway in Tokyo. For the past several decades, bureaucrats have ruled Japan. It has been they, not elected officials, who have played the leading role in drafting budgets, writing legislation, and regulating Japan's industries. Politicians from the entrenched Liberal Democratic Party (LDP) not only looked the other way, they actively abetted the bureaucrats, cooperating with them behind closed doors to stuff the budget with pet projects and undermine the ability of the prime minister and cabinet to set the agenda. The result was that private interests often trumped the public interest. Debt ballooned—to what is now a staggering 190 percent of GDP, the highest of any wealthy nation. What's more, Japan punched well below its weight on the world stage, as one inept prime minister after another struggled to make his mark.

But in a landmark election this summer, the Democratic Party of Japan (DPJ) won an overwhelming victory over the LDP, which had held power in Japan for more than a half century, virtually without interruption. The new guard, led by Prime Minister Yukio Hatoyama, has vowed "true regime change"—which means taking the right to make policy out of the hands of bureaucrats and giving it to the politicians elected to do that job. Their argument is that only political leaders accountable to voters can make the decisions that are needed for Japan to thrive. So they are doing something that is possibly unprecedented for a rich country in the modern era: they are looking nearly 9,700 kilometers away to another rich country—the United Kingdom—and attempting to graft its Westminster system of government onto the Japanese way of policymaking.

If they are successful, Tokyo will work more like London. Policies that now bubble up from obscure bureaucrats will instead trickle down from the prime minister and his cabinet, in the British fashion. Elected officials will formulate the budget, draft laws, and set policies on the basis of the mandate they received in elections. For the first time in modern Japanese history, policies will be debated, negotiated, and hashed out in broad daylight, and then put to a vote in the Parliament. The job of the bureaucrats will be, as Hatoyama put it, to "assist politicians in formulating, coordinating, and deciding upon policies," and then to implement those policies once the cabinet has made its decision. In other words, Japanese politicians will start to do what leaders in other democracies have always been expected to do: lead.

The implications of this are likely to be enormous. For starters, it will centralize power in the prime minister's office. By itself, that will help the government to do what it promised in the DPJ manifesto: to control government spending; to shift Japan to a new growth model, less dependent on exports and more friendly to consumers; and to build a new social safety net for a rapidly aging society. It will enable Japan's government to outline its priorities publicly, and it will allow the electorate to judge the government's progress. Bureaucrats who had packed the budget with payoffs to political allies, and who had resisted any change in the export model and welfare system, will no longer have enough power to freeze the status quo. Japan, for so long the nation voted least likely to reform, may start to change. More broadly, centralizing power will give the prime minister a stronger voice on global issues. When Hatoyama speaks about Japan's relationship with the United States or China, or its response to climate change or the war in Afghanistan, other leaders will know that he has real authority to follow through on his promises, and that he will not be undermined by bureaucrats and party backbenchers with their own agenda.

DPJ officials have been looking to London as a model for years. In 1993 powerful LDP politician Ichiro Ozawa left his party in a bitter split after writing a manifesto, titled Blueprint for a New Japan, in which he praised the British system for creating a strong cabinet and prime minister, while ensuring that the prime minister would face public scrutiny through regular appearances before Parliament. Ozawa argued that if Japan's leaders wanted to revitalize its flagging economy and manage its foreign relations in the uncertain post–Cold War world, reforms had to be introduced to strengthen the prime minister's office and unify the cabinet and the ruling party. The electoral system would have to be reformed, he said, by shifting from multimember districts to small, single-member districts that would encourage the formation of a two-party system characterized by vibrant and even tumultuous policy debates.

Since then, Ozawa has traveled to Britain several times. Most recently, in September, he visited in his new capacity as DPJ secretary-general—essentially the party whip—to discuss with both Labour and Conservative M.P.s strategies for pushing the cabinet's agenda through Parliament. Other top DPJ officials have also visited London on fact-finding missions. The new deputy prime minister, Naoto Kan, took a study trip there in June and consulted with senior Tory and Labour politicians on how to control the bureaucracy. In the introduction to a subsequent report on the trip, he described how he learned from the "mother country of the parliamentary cabinet system" to concentrate policymaking in the hands of cabinet ministers. In a recent book, Foreign Minister Katsuya Okada also praised the British model and stressed that reforming Japan's system of government was a prerequisite for other policy changes. Hatoyama himself has made blunt reference to the powers of the British cabinet. Before the election, a vice minister for agriculture criticized the DPJ plan to introduce income support for farmers as "unrealistic." Hatoyama replied by saying that if a British civil servant were to criticize a political party in the same manner, he would be sacked.

Now that he is in power, he has managed to overhaul the political structure with surprising speed. In just a few months, the government has dissolved the Council of Administrative Vice Ministers, an institution created in the late 19th century that met before cabinet meetings to hammer out policy disagreements among ministries. The government has also introduced committees of elected cabinet ministers to coordinate policy, an idea that also emerged from the British system. Perhaps most important, it has made good on a campaign vow to remove the power to draft budgets from the bureaucracy and put it instead in the hands of a committee looked after by Deputy Prime Minister Kan, an elected official. Another committee, overseen by another minister, rather than an unelected bureaucrat, will review the budget programs for signs of waste and mismanagement.

One result is that the normally staid style of Japanese policymaking looks more disorderly. This fall a very public debate emerged over a controversial moratorium on debt repayments for small businesses, which in its most extreme form would free them from repaying loans for three years, a major blow to bank balance sheets. In the past, consideration of such a policy would have wended its way through the bureaucracy at the same time that LDP policy subcommittees debated it. A compromise would have been hammered out before it even appeared before the cabinet. This time, Shizuka Kamei, the head of the People's New Party in the cabinet, with a portfolio that includes the Financial Services Agency, insisted on the need for a three-year mandatory moratorium, which would have likely led banks to curtail lending sharply, possibly reversing Japan's fragile economic recovery. Hirohisa Fujii, the finance minister, and other ministers publicly questioned the wisdom of the policy. A committee headed by a parliamentary vice minister—an elected official—was convened, and in a transparent process drafted a compromise bill to be put to Parliament.

The same sort of public debate is now underway on how the new government should deal with the U.S. The big issue right now is the DPJ's campaign promise to reduce the American military footprint on Okinawa, and to revise a 2006 agreement in which the U.S. agreed to close the Futenma air station on the island. Now that the DPJ is in office, Okada is pushing for a revision that would shut down Futenma and move its operations to the Air Force base at Kadena on Okinawa—an option that Washington had previously rejected. Toshimi Kitazawa, the defense minister, has taken the opposite side, in support of the 2006 deal. Hatoyama, for his part, has so far said only that the ultimate decision will be his own.

It's far from clear the British model will catch on. It requires a strong personality in the prime minister's office, and so far Hatoyama has been no Margaret Thatcher. While he has articulated a vision for Japan's role in the world, he has been less forthcoming when it comes to the specifics of the government's agenda. Moreover, the introduction of a more free-wheeling kind of public debate is no guarantee that the government will find solutions to the tough problems Japan faces. The government may simply fail to find a new growth model for the economy, which might force it to return to the LDP model. That means promoting exports and providing subsidies to inefficient domestic producers, coupled with more social spending, which would worsen the debt load. In foreign affairs, a transition to the more flexible, Asia-centered policy that Hatoyama campaigned on could be derailed by any one of many hot-button issues, including Futenma and Japan's role in Afghanistan. If there is too much visible disarray in the government, public support for it could plummet.

So far, though, the changes in the political structure seem to be sticking, despite the fierce resistance of the bureaucrats who have carved out cushy roles for themselves over the decades. The ministries have complied with the Hatoyama government's orders, most notably its demand that the Finance Ministry scrap work that had already been done on the budget and allow the government to review next year's budget requests from scratch. DPJ backbenchers have grumbled to the press about having no policy role to play under the new system—but there is little else they can do. So for now, the cabinet rules, unobstructed to an unprecedented degree by mandarins of the ruling party and the bureaucracy. For better or worse, the cabinet's deliberations will henceforth be open, and it will be held accountable for policy failures. Other nations—and the Japanese people—will start to expect the government to make decisions and stick by them. The road from Westminster to Tokyo will be complete, and it will come to a stop squarely at Hatoyama's desk.